COPYRIGHT AS TRADE REGULATION
Copyright as Trade Regulation
Sara K. Stadler*
Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. Locating the Public Interest in Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
A. The “Encouragement of Learning” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
B. Access to Copyrighted Works. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
C. Open and Populous Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
II. Toward a Theory of Unfair Competition in Copyright . . . . . . . . . . . . . . . . 19
III. On the Utility of Copyright as Trade Regulation. . . . . . . . . . . . . . . . . . . . 29
A. Solving the “Problem” of Personal Copying. . . . . . . . . . . . . . . . . . . . . . . 29
B. Preempting the End Run Around Copyright . . . . . . . . . . . . . . . . . . . . . . . 34
C. Breathing Life into the Fair Use Defense . . . . . . . . . . . . . . . . . . . . . . . . . 38
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Introduction
In section 107 of the Copyright Act, Congress codified the defense known as “fair use,” under which qualifying, unauthorized uses of copyrighted works “for purposes such as criticism, comment, news reporting, teaching …, scholarship, or research [are] not … infringement[s] of copyright.”[1] Scholars have described fair use as a remedy for “market failure,”[2] and therefore a temporary substitute for functioning markets;[3] a doctrine slouching toward irrelevance[4] and even death[5] as markets become more sophisticated; a tool for advancing social goals when a finding of infringement promises to produce “bad results”;[6] and a doctrine that is “empty” of substance[7] and therefore “dangerous”[8] because it creates the illusion that there are limits to an increasingly unlimited entitlement. In other words, copyright scholars cannot agree on what, exactly, the fair use defense is for. What hope is there for the courts?
Nowhere is this disagreement more apparent than in the dispute over the “Google Library Project,” as a part of which Google has proposed to scan every book owned by four university libraries and the New York Public Library. The resulting digital images would constitute a powerful research tool: Not only would the images be searchable, by keyword, but researchers also could view the results of their searches online, in image form—along with bibliographic information enabling them to purchase (or borrow) the books of the most interest. In short, “[t]he Library Project [would] make it easier than ever before for users to locate the wealth of information buried in books.”[9] Some of those books would be copyrighted, and so Google has announced that if a search produced a “hit” on a copyrighted work, researchers could view only a few sentences from that work in the form of “snippets” surrounding the search term. (If a search revealed a work in the public domain, researchers could browse the work in its entirety.)
When Google announced its project, authors and publishers objected, arguing that Google would be engaging in repeated acts of infringement by engaging in the wholesale copying (scanning) of works in which it did not own the copyrights. This was a valid objection, for the Copyright Act, in section 106, gives copyright owners the “exclusive right[ ] … to reproduce the copyrighted work in copies” and to authorize others to do the same.[10] The word “copies” is defined broadly, in section 101, to include any “material object[ ] … in which a work is fixed by any method now known or later developed.”[11] Because computer memory (whether volatile or nonvolatile)[12] is a “material object,” digital scans of books stored in computer memory are “copies” for the purposes of section 106. In response to these objections from authors and publishers, Google proposed a change to its policy under which copyright owners who did not wish their works to be scanned could “opt out” by November 1, 2005, the date on which Google planned to begin the expensive process of digitization. Unsatisfied with this solution, a group of authors sued Google on September 20, 2005. A group of publishers filed a similar lawsuit a month later, on October 19. The cases are pending in the United States District Court for the Southern District of New York.
Although Google might argue that its conduct does not constitute prima facie infringement, the fate of its library project is likely to depend on the application of the fair use defense. Section 107 of the Copyright Act instructs courts to decide whether an accused use is “fair” by evaluating four statutory factors,[13] of which the Supreme Court has placed the most emphasis on the first (the commerciality of the use) and the fourth (the effect of the use on the market for the original). It is easy to see why: Commercial uses are more likely than noncommercial ones to compete with sales of the copyrighted work. Any such competition is likely to result in lower prices and reduced market share for everyone, which market effects, in turn, are likely to diminish the profits of those erstwhile monopolists, the creators (and their assigns). Faced with the prospect of earning lower profits, at least some creators are likely to forego the act of creation in favor of other, more profitable pursuits, thus leading to a decline in the number or the quality of works created. Nobody wants that.
The fair use defense would be easy to apply if commercial uses usurped the market for the copyrighted work, while noncommercial (“nonprofit educational”)[14] ones did not. But there are two problems with such a test: First, there is no such thing as a truly noncommercial use, making every use commercial and therefore suspect. One might think that scholarly activities, at least, would be comfortably on the gratis side of the line. Yet courts have found even the activities listed in section 107—including scholarship—to be commercial when users gain an “indirect economic advantage” by failing to pay the copyright owner for a license, thus depriving him or her of potential licensing revenues.[15] As a number of scholars have noted, this test is circular. If depriving the copyright owner of licensing revenues were enough to make a use “unfair,” then the fair use defense would be no defense at all, for by definition, the fair use defense comes into play only when a defendant fails to pay for a license. Recognizing this,[16] courts have asked whether the defendant has deprived the copyright owner of licensing revenues only in “traditional, reasonable, or likely to be developed markets.”[17] The problem with this inquiry, however, is that copyright owners themselves can define whether markets for their works are “likely to be developed” by developing those markets themselves. In other words, copyright owners themselves can define away the “market failure” for which fair use is the remedy.
The only exception to this rule appears to be that “‘[c]opyright owners may not preempt exploitation of transformative markets,’”[18] which reveals the second problem with using commerciality as a test of fairness: As the Supreme Court warned in Campbell v. Acuff-Rose Music, Inc.,[19] “the mere fact that a use is educational and not for profit does not insulate it from a finding of infringement, any more than the commercial character of a use bars a finding of fairness.”[20] In other words, commerciality does not appear to be dispositive of fairness either way. The “purpose and character” of the use in Campbell was a Two Live Crew parody of the Roy Orbison classic “Oh, Pretty Woman,” but it was commercial nonetheless: The song was being offered for sale in music stores nationwide, and Two Live Crew (or more likely, its record company) was making money. Whether the rap group also was competing with Roy Orbison and his music publisher was another question. Although it remanded the question to the district court, the Supreme Court did not seem to think so. “As to parody pure and simple,” it wrote, “it is more likely that the new work will not affect the market for the original in a way cognizable under this factor ...”[21] Why not? Because a parody is transformative, not competitive. It does not “supersed[e]” the original, but instead, it “adds something new, with a further purpose or different character, altering the first [work] with new expression, meaning, or message.”[22] According to the Court, “the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works”[23]—even commercial ones.
What does this mean for Google? Under existing law, Google must show either “market failure” or transformation in order to prove its entitlement to the fair use defense. This is likely to be a considerable challenge. Consider market failure first: Knowing that the district court is likely to ask whether Google has entered a market that is “likely to be developed” by the plaintiffs,[24] at least one of the plaintiffs has hastened to develop that market by announcing a searchable library of its own. On December 12, 2005, HarperCollins issued a press release in which it stated its intention to “create a digital warehouse for all of its content” that would both “satisfy[ ] the demands of the marketplace” and “allow[ ] the publisher to remain in control of its digital files and intellectual property.”[25] Because HarperCollins also has stated that one of its goals for the project is the “monetization” of its content,[26] the district court would be perfectly justified in holding that Google is depriving the plaintiffs of potential licensing revenues by providing the public with the means to search that portfolio for free. Google used copyrighted works to enter a market; it did not pay to license rights in those works; and the market it entered was “likely to be developed” by the owners of copyright because at least one owner actually developed it.
Google faces a similar challenge in defining (or redefining) “transformative.” While a handful of lower courts have stretched the definition to include mere reproductions,[27] the Supreme Court in Campbell seems to have meant “transformative” to apply to those derivative works in which a user takes expression from a copyrighted work and adds expression of his or her own—creating, in the end, “something new”[28] like a biography or an editorial or a parody (but not a satire!).[29] At the very least, according to the Court, a transformative work must “alter[ ]” a copyrighted work with “new … meaning, or message,”[30] and it is difficult (although not impossible) to imagine doing such a thing without adding new expression, too. Judge Pierre Leval, whose article on fair use appears to have inspired the Supreme Court, probably had very much the same thing in mind. As he wrote a few years before Campbell, a transformative work is one that “adds value to the original … in the creation of new information, new aesthetics, new insights and understandings.”[31]
Google is not doing any of these things; it simply is proposing to reproduce books in digital form. It is engaging in unauthorized, untransformative, unquestionably beneficial copying.[32] The benefits for researchers are obvious, but the publishing industry stands to gain as well. If scanning books and making them searchable online leads researchers to find books that they otherwise might not have found, then a searchable library might help to expand the readership of books, thus leading to increased sales and increased borrowing from libraries (which, in turn, leads to increased sales). Google also is providing these benefits at very low cost to the public, in significant part because nothing that Google proposes to do has the least chance of preventing writers from writing, or publishers from publishing. Google is not competing with the publishing industry—as if, for example, it were enabling consumers to read copyrighted books online. In fact, it is not engaging in any activity in which the publishing industry has shown the remotest interest (until now). Unfortunately, however, none of these observations is particularly relevant to the inquiry into fair use today.
The late Professor L. Ray Patterson once observed, wisely, that “[m]ost discussions of the fair use of copyrighted works provide answers without ever asking the right question. That question is not ‘what is fair use?’ but ‘what is copyright?’”[33] If fair use has become “a bizarre, occasionally tolerated departure from the grand conception of the copyright monopoly,”[34] the fault is not in the defense itself, but in the “grand conception”: an increasingly proprietary copyright law that overwhelmingly equates the public interest with the private interests of copyright owners. Those private interests, in turn, are held by the very companies who control the market for copyrightable works. Is it any coincidence that the new economics of copyright places so much emphasis on private ordering,[35] in which the government has no part to play?
Professor Julie Cohen has argued that “we need a theory of the ordinary user: a theory of what conduct is private.”[36] I agree. Because any such theory must “promote the Progress of Science,”[37] I begin, in Part I, by locating the strands of the public interest in copyright, which strands include the inducement of creation but also include other values, such as the existence of open and populous markets. In Part II, I describe a copyright law in which the creation of property rights is not an end in itself, but a means of identifying and punishing methods of unfair competition in the relevant markets for copies of copyrighted works. In these markets, acts of copying are not “unfair,” in themselves, because they do not inflict significant competitive harms. Accordingly, I argue that copyright owners should enjoy only the exclusive right to distribute copies (and perhaps, derivatives)[38] of their works to the public. In Part III, I reveal how this theory might help to resolve a few of the issues at the very center of the copyright debate: the pervasiveness of copying; the rise of contractual and technological access controls; and, of course, the “death”[39] of the fair use defense
I. Locating the Public Interest in Copyright
Among copyright scholars, a debate of sorts is raging as to whether copyrights are “property.”[40] While this is an interesting question, it might not be a very useful one. Contrary to what Blackstone famously wrote, to describe something as “property” is not to say that one has unlimited rights in it. Even property rights are subject to limits, which the government imposes in furtherance of the public welfare. As a consequence, it might not matter very much whether copyrights are “property” or are, instead, limited grants of exclusivity, made for limited times, and effected through enactments of positive law “according to the will and convenience of the society.”[41] If the ownership of property is characterized by the right to exclude others, then copyrights do indeed create property rights. But copyright law also regulates; in granting rights, it describes the range of acceptable behaviors in those having an interest in copyrighted works—i.e., creators, publishers, users, consumers, and the public. When Professor Patterson wrote that copyright has “both a proprietary and a regulatory basis,”[42] he was right, although not necessarily in the way he intended. Property and regulation are two sides of the same coin: To the extent the law creates property rights in creators and their assigns, it regulates the behavior of the rest of us.
The most useful observation about copyrights as property might be that characterizing copyrights as “property” risks conveying the impression that copyrights are more exclusive than they really are. The word “property” connotes a broad right—that is, a right with few, if any, exceptions. It also connotes a durable right. At a fundamental level, the question whether copyrights are property revolves around the extent to which the government can and should tinker with the exclusive rights that copyright owners have come to enjoy. Most would agree that the government has the power to do this. For the most part, however, scholars have elided the question of what interests the government should consider when it decides whether and how to exercise this power. Obviously, the government should seek to “promote the Progress of Science,”[43] but this injunction is so vague as to be almost completely unhelpful. What, exactly, are the interests underlying copyright law?
The law itself is ambivalent on the subject. Consider the fair use defense: The fact that a use can be prima facie infringing and nonetheless be fair suggests that the government does have the power to shrink the property right. Courts exercise this power to safeguard the public interest in cases in which upholding the exclusive rights of the copyright owner would undermine the purposes of copyright law.[44] The problem arises in defining the “public interest.” Does the public interest lie in providing copyright owners with exclusive rights that may be invaded only when the First Amendment requires it? Or in codifying the fair use defense, did Congress delegate to courts the authority to grant the public access to copyrighted works when the public benefit outweighs the private harm to the copyright holder? Courts have not provided consistent answers to these questions, and as a result, the constituencies of copyright are locked in a struggle to locate the public interest, to define “fair use,” and to determine the meaning of copyright itself.
A. The “Encouragement of Learning”
In pursuing private interests, private actors sometimes engage in behaviors that threaten the public interest. The government responds by seeking to modify those behaviors, whether legislatively (by enacting statutes) or administratively (by providing agencies with the authority to engage in rulemaking and enforcement). Copyright law itself is a response to behaviors that threaten the public interest: Because copyrightable works may be copied and distributed without consuming the original, creators who released their work to the public without the protection of copyright law soon would find themselves competing with others for sales of copies of their own works. Unable, as a result, to recoup the costs of their labors, creators might reduce their investments in creation, thus leading to the creation of fewer copyrightable works. To prevent this harm, Congress has acted legislatively to “secur[e] for limited Times to Authors … the exclusive Right to their Writings.”[45] In granting exclusive rights to creators, the Copyright Act promotes the public interest by promoting “the encouragement of learning”[46]—a goal that surely is consistent with the constitutional injunction to “promote the Progress of Science.”[47]
For the foregoing reasons, the grant of exclusive rights to creators is widely thought to promote the public good. As courts are fond of reminding litigants, even James Madison wrote in 1788 that “[t]he public good fully coincides ... with the claims of individuals.”[48] But this statement is only partly correct: To be sure, the enterprise of creation depends on granting creators the right to prevent others from making at least some uses of their works, and accordingly, the public good flows from granting at least some “individual claims” in works of authorship. But as Madison likely would acknowledge today, the “public good” does not always and only reside in the grant of exclusive rights. The phrase “encouragement of learning” itself suggests as much: If the enterprise of learning depends upon the creation of copyrightable works, it also depends on the quality and diversity of those works, as well as their proliferation and distribution throughout society. It may even depend on their proliferation and distribution in the form of tangible copies. It certainly depends on giving the public the right to respond to those works in sundry ways. And none of those things is possible without giving the public at least some access to copyrighted works.
B. Access to Copyrighted Works
In determining whether a defendant has engaged in copyright infringement, courts ask whether he or she had “access” to the copyrighted work so as to determine whether he or she copied it. This stands to reason, for it would be impossible to copy a work without having seen it (or, in the case of music, having heard it). For this purpose, the law defines “access” as the reasonable opportunity to view (or hear) a copy of a copyrighted work. One can imagine having perfectly legal access to that copy, as if, for example, one were to buy a copy of a copyrighted novel. But buying a copy of a novel does not give the buyer the right to use the copyrighted work “fixed” in that copy—i.e., the creative expression itself. As section 202 of the Copyright Act provides, “[o]wnership of a copyright … is distinct from ownership of any material object in which the work is embodied.”[49] The copy is one thing; the expression is quite another. Thus, for most purposes, the word “access” indicates an interaction between a human being and the expression contained within a copy of a copyrighted work.
Obviously, copyright owners want human beings to interact with their expression, but they want to control the terms of that interaction, too. Exactly one hundred years ago, a publisher testifying before Congress talked of binding the reading public by a contract placed on the first page of a book, “prohibiting [them] from doing anything with [the] book except reading it themselves.”[50] Authors and publishers want the same thing today: They want people to buy and read copies of their books, but they do not want people to engage in any further interaction with the expression inside. To quote Professor Yochai Benkler, authors and publishers want people to be “consumers” of copyrighted expression—not “users” of it.[51]
To a significant extent, copyright law gives authors and publishers what they want. Section 106 of the Copyright Act gives creators “the exclusive rights … (1) to reproduce the copyrighted work in copies …; (2) to prepare derivative works based upon the copyrighted work; [and] (3) to distribute copies … of the copyrighted work to the public …”[52] Owners of copyright in qualifying types of works (including books) also receive “the exclusive rights … (4) … to perform the copyrighted work publicly; [and] (5) … to display the copyrighted work publicly.”[53] Any such “access” to a copyrighted work must be bought and paid for—or must wait until the expiration of the copyright. As the Supreme Court has instructed, “copyright law ultimately serves the purpose of enriching the general public through access to creative works,”[54] but this purpose is served by providing the public with unauthorized access only “after the limited period of exclusive control has expired.”[55] For the duration of the copyright term, copyright owners have the right to require payment in return for access, or even to refuse such access altogether.[56] Indeed, courts have a word for unauthorized access to a work during its term of copyright: “infringement.”[57]
So far as courts are concerned, construing access as “access, eventually” is the only way to “enrich[ ] the general public through access”[58] while promoting “the encouragement of learning.”[59] On the one hand, copyright law is supposed to induce creation (and therefore encourage learning) by giving copyright owners the right to exclude the public from interacting with their works in ways prohibited by the statute. On the other hand, copyright law is supposed to grant the public the right to interact with copyrightable works. On their face, the two purposes are inconsistent. They “oppose each other,” as Professor Glynn Lunney has observed, “with exactly equal force.”[60] Courts have responded to this “paradox” by placing a finger on the scale—“by implicitly presuming that more incentives are desirable in the absence of some unusual need for access”[61] during the copyright term. In other words, in the tug of war between inducement and access, inducement almost always wins.[62]
If providing the public with access to copyrighted works is, like fair use, a “bizarre … departure”[63] from the rule that inducement of creation flows from the grant of more and broader property rights, then one cannot help but feel that the courts are missing something very important about access: Access is not something that by its nature must be withheld entirely from the public until the end of the copyright term. Access is very much like property itself: it is not absolute; it is qualified. That is, access to some of a copyrighted work can be granted to some of the public for some purposes without sacrificing the public interest in the encouragement of learning. We know this is so because in sections 107 through 122 of the Copyright Act, Congress has enacted pages of limitations on the broad rights listed in section 106. For the most part, Congress has defined those limitations very narrowly, but it need not have done so. Congress could have provided creators with fewer rights, thus providing the public with more access to the fruits of creation. Congress also could have asked whether there might be other public interests in copyright, requiring it to factor those interests into the balance.
If, as I argue, the public good does not always and only reside in the satisfaction of demands for private reward, then lawmakers must begin to ask themselves what other values might comprise the “public interest” in copyright. Questions like this have been asked (and answered) before. Congress and the courts have spent more than a century describing the public interest, not only in enacting and interpreting the Copyright Act, but also in enacting and interpreting such federal statutes as the Sherman Act of 1890,[64] the Clayton Act[65] and the Trade Commission Act of 1914,[66] the Communications Act of 1934,[67] the Lanham Act of 1946,[68] the Cable Television Consumer Protection and Competition Act of 1992,[69] and the Telecommunications Act of 1996[70] (to name a few). These statutes were not enacted pursuant to Article I, Section 8, Clause 8 of the Constitution,[71] and they do not create rights in “original works of authorship.”[72] They do, however, regulate the behavior of participants in the markets in which copies of copyrighted works are bought and sold—markets in which copyright owners take a particular interest.[73] And as it happens, the public has an interest in the operation of those markets as well.
C. Open and Populous Markets
In 1890, Congress enacted the Sherman Act, which prohibits companies from monopolizing trade or from entering into any “contract, combination …, or conspiracy, in restraint of trade or [interstate] commerce.”[74] Congress expanded its reach in the Clayton Act of 1914, which proscribes specific acts, such as mergers and acquisitions, the result of which is “to substantially lessen competition” or “to create a monopoly [of] any line of commerce.”[75] In 1914, Congress also created the Federal Trade Commission to investigate and prosecute “[u]nfair methods of competition in commerce”[76]—that is, acts “which if left untouched would probably create the evils prohibited by the Sherman … Act.”[77] While scholars disagree as to the legislative intent behind these enactments,[78] Professor Herbert Hovenkamp has argued that, “consistent with nineteenth century American ideology generally, … the antitrust laws were passed out of a pervasive fear of private ‘bigness’ and the political power that it engendered.”[79]
“[P]rivate ‘bigness’” also can lead to market power: Large companies (and combinations of companies) have greater resources than their competitors enjoy, thus giving them the ability to price their goods below the cost of producing them—at least for a time. Competitors who do not have the resources to lower their own prices soon find themselves enjoying reduced shares of the market. As the large companies gain market share by squeezing out competitors, they also gain the ability to return prices to higher levels. Consumers, who are forced to pay those higher prices, experience a reduction in what economists term “consumer surplus.” Consumers also may lose the opportunity to purchase products from those companies who never enter the market because of “barriers to entry” like the predatory pricing practices described above.[80] Antitrust law was meant to “protect the public against [these] evils commonly incident to monopolies”:[81] higher prices; products or services of lesser quality; and fewer choices as a result of competitors exiting the market.[82] “When a producer is shielded from competition, he is likely to provide lesser service at a higher price; the victim is the consumer who gets a raw deal. This is the evil the antitrust laws are meant to avert.”[83]
If Congress has addressed itself to “bigness,” it also has expressed its concerns about “concentration,” or the tendency of an industry to consolidate through mergers, acquisitions, and other such transactions.[84] In 1890, Senator Sherman himself spoke of his “desire to put an end to great aggregations of capital because of the helplessness of the individual before them.”[85] And in 1950, Congress amended section 7 of the Clayton Act in 1950 because it “fear[ed] … what was considered to be a rising tide of economic concentration in the American economy.”[86] Congress did not target industry concentration simply because it leads to higher prices, although it can do that, too. Congress also wished to “perpetuate and preserve, for its own sake and in spite of possible cost, an organization of industry in small units which can effectively compete with each other.”[87] Such competition yields a host of benefits including product diversity, which is most important when the “product” is information.[88] As the Supreme Court famously wrote in Associated Press v. United States,[89] “the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public …”[90]
As the foregoing discussion should make clear, the antitrust laws target public evils, not private ones. Accordingly, the laws exist not to “protect deserving private persons, but to vindicate the public interest,”[91] which the case law describes as “paramount.”[92] Courts have described the nature of that interest in several ways: First and foremost, the consuming public has an interest in the existence of free “price competition in an open market”[93] characterized by that particularly American value, “equality of opportunity.”[94] Second, the public interest lies in the existence of a populous market in which “small units”[95] (such as individuals) can have an impact. The public also has an interest in promoting these market structures because they facilitate public access to a diversity of products.
These conceptions of the public interest are not unique to the antitrust laws. In regulating the communications industries, Congress repeatedly has stated its wish to open markets to increased competition. In some cases, these statements may be precatory; as Professor Timothy Wu has revealed, Congress supported the oligopolistic broadcast industry in its fight to exclude cable companies from the market.[96] On the whole, however, there are plenty of indications that Congress does believe in the benefits flowing from competitive markets, including lower prices, higher quality, and diversity of expression. As part of the Telecommunications Act of 1996,[97] for example, Congress required telecommunications carriers to provide competing local telephone companies with “nondiscriminatory access” to networks and equipment.[98] Similarly, in the Cable Television Consumer Protection and Competition Act of 1992,[99] Congress sought to reverse the effects of industry concentration[100] by requiring cable companies to dedicate some of their television channels to local and nonprofit broadcast stations, respectively,[101] which action Congress viewed as “critical to an informed electorate.”[102] In holding these “must-carry” provisions constitutional, the Supreme Court identified several “important governmental interest[s]” they served, including: (1) “‘promoting fair competition in the market for television programming’”; and (2) “‘promoting the widespread dissemination of information from a multiplicity of sources.’”[103]
To date, copyright law has not embraced these goals, or has not done so expressly. One reason, perhaps, is that copyrights themselves are offered as solutions to the problem of competition;[104] they are “legal monopolies”[105] under which copyright owners enjoy the right to exclude competitors from using their works in various ways. If they choose to exercise that right, copyright owners can market fewer copies of their works to fewer consumers at higher prices. “Thus, at least in a particular market and for a particular period of time, the Copyright Act tolerates behavior that may harm both consumers and competitors.”[106] This produces what seems to be a direct “conflict[ ]”[107] between copyright law and the antitrust laws: Copyright law gives copyright owners the right to inhibit competition, but “[i]ntellectual property rights do not confer a privilege to violate the antitrust laws.”[108] Courts are left to balance the two statutory schemes, producing inconsistent results.
Scholars have sought to minimize this conflict by tinkering with how they define the “relevant market” for antitrust purposes: Instead of defining a product market to include, for example, a particular book or books by a particular author, scholars might broaden the definition to include books of a particular type. If, as Professor Christopher Yoo has argued, “substitutes are readily available for most works,”[109] then copyrights do not create market power at all: Competitors can create or purchase their own copyrighted works, or use works in the public domain. To quote Professor Richard Epstein, “No one has to use any particular song or story for a particular project, but can draw on a rich culture, including items that have fallen out of copyright protection.”[110] As for consumers, if they lack the resources to buy a novel about Harry Potter, they can buy a novel about Oliver Twist instead.
As the foregoing example suggests, there may be problems with this approach. While some works may readily be substituted for others, some works (like Harry Potter novels) almost certainly may not. Other examples abound. Moreover, even if Professor Yoo is correct, it does not follow, as Professor Epstein has concluded, that potential uses lost to the copyright monopoly are “of little consequence for any dynamic development of the arts …”[111] The reason lies in the structure of those industries in which market participants are most likely to hold copyrights (the “copyright industries”). As Professor Benkler has explained, “strong” copyrights provide the most benefit to organizations who hold large inventories of existing works.[112] In addition to marketing existing works, those organizations can adapt existing works into new ones, thus integrating the creation function with the inventory management and marketing functions.[113] Using the returns from this vertical integration, they also can acquire other organizations, thus increasing the number of copyrighted works in their inventories. Competitors who lack inventories of their own find themselves increasingly marginalized.[114] Not only does this arms race lead to industry concentration through acquisitions, but it also perpetuates itself by creating “incentives systematically to misapply human capital to information resources.”[115] It also subjects consumers to rising prices, diminishing supply, and a wearying homogeneity of expression.[116] If Disney is not “repackaging Mickey Mouse cartoons,”[117] it is buying Winnie the Pooh and making deals with Pixar, and in the end, everything looks the same.[118] Thus, if copyright law is not opposed to open and populous markets, per se, it is not particularly productive of them, either.
Until now, lawmakers (and many scholars) have assumed that the public must tolerate these evils in order to induce creation, which is thought to be more important than promoting the benefits of competition. In fact, however, the conflict between these values is overstated. Like copyright law, the antitrust laws and the communications laws recognize that some return on investment, including the grant of property rights, is necessary to induce investments of capital and labor. Yet the existence of those rights does not prevent the government from regulating the behavior of those who enjoy them. Congress has not hesitated to place limits on property rights in order to protect the public interest—requiring telephone companies, for example, to provide their competitors with access to lines and switches so that consumers could enjoy the benefits of price competition in the market for local and long distance service. Yes, the regulated companies held property rights in their infrastructure, but as the Supreme Court wrote in a case brought under the Sherman Act, “rights … may be pushed to evil consequences, and therefore restrained’” by law.[119]
Copyright law operates under the same principles, for rights in copyrightable works are perfectly capable of being “pushed to evil consequences,” too. Imagine, for example, how it would impact competition in the publishing industry if J. K. Rowling could prevent other novelists from writing about boy wizards who engage in epic struggles with dark lords. The Copyright Act prevents this competitive harm by providing, in section 102(b), that “[i]n no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery …”[120] In extending protection to creative expressions of ideas but not the ideas themselves, “Congress balanced the competing concerns of providing incentive to authors to create and of fostering competition in such creativity.”[121] There are other ways in which copyright law has fostered competition, too: the compulsory license is an ancient example; the defense of “copyright misuse” is a recent one. But these examples are not evidence that Congress views the Copyright Act as an adjunct to the antitrust laws. In fact, the evidence points the other way. The structure of the copyright industries and their resistance to technological change are indications that Congress has given too much weight to inducement at the expense of providing access to both competitors and the public.
Consider the several strands of the public interest in copyright: First, the enterprise of learning depends on granting creators the right to prevent others from making at least some uses of their works. Second, that enterprise depends on granting the public access to copyrighted works for at least some purposes. Third, that enterprise also depends on promoting at least some forms of competition in the markets in copyrighted works. These strands need not contradict each other; they can, and should, be woven into a coherent fabric that “promote[s] the Progress of Science.”[122] What is needed is a guide by which lawmakers and courts can mediate the seemingly conflicting demands of exclusive rights and access, of “legal monopolies”[123] and open markets, of inventory management and “expressive diversity,”[124] and of private reward and public benefit. Fortunately, that guide already exists; it is the law of unfair competition, and its spirit already resides at the heart of copyright law.[125]
II. Toward a Theory of Unfair Competition in Copyright
The law of unfair competition has its roots in the belief that “[t]he freedom to … compete for the patronage of prospective customers is a fundamental premise of the free enterprise system.”[126] Sometimes this competition causes harm in the form of “divert[ed] business,” but the law concerns itself with that harm only when competitors use “particular methods of competition determined be unfair.”[127] Among those methods is the tort of “passing off” (also known as “palming off”), which occurs when “a producer misrepresents his own goods or services as someone else’s.”[128] The usual way in which a producer commits this wrong is by marking his goods with a trademark that confuses consumers as to the origin of the marked goods.[129] “The primary and proper function of a trademark is to identify the origin or ownership of the article to which it is affixed.”[130] When a producer has established rights in such a mark,
others are debarred from applying the same mark to goods of the same description, because to do so would in effect represent their goods to be of his production and would tend to deprive him of the profit he might make through the sale of the goods which the purchaser intended to buy.[131]
Congress codified these principles in the Lanham Act of 1946.[132] Like the bodies of law that preceded it, the Lanham Act concerns itself with “securing to the owner the good will of his business and protecting the public against spurious and falsely marked goods.”[133] Thus, while the statute does exist to safeguard the investments of trademark owners by giving them exclusive rights, it also exists to serve the public interest. Indeed, “the public interest in preventing confusion around the marketplace is paramount …”[134]
Like the property right in copyrights, the “property” right in trademarks is limited.[135] Under the Lanham Act, rights in trademarks flow from the use of those marks in interstate commerce to identify the source of the marked goods. This “trademark use” is the prerequisite to protection because consumers cannot form the mental link between a trademark and the goods it identifies—known as “secondary meaning”—unless those goods are released into the stream of commerce. In other words, consumers cannot make the association between “Coke” and a cola beverage unless and until that beverage is available for purchase. In the absence of such an association, another producer would be free to use the word “Coke” to identify its own products because that use would not engender any confusion. Thus, by conditioning the property right on the use of trademarks in commerce, trademark law encourages producers to distribute goods bearing those marks to the public. To borrow a term from copyright law, trademark law encourages “publication”[136] by encouraging producers to make their wares “available to members of the public regardless of who they are or what they will do with [them].”[137]
Once a producer has established rights in a mark, he or she has the right to prevent others from marking their goods with symbols that are likely to confuse consumers as to the source of those goods. Courts determine whether such a “likelihood of confusion” exists by weighing several factors, including “the strength of [the mark], the degree of similarity between the two marks, the proximity of the products” in the marketplace, “the sophistication of the buyers,” and of course, the existence of any “actual confusion.”[138] Thus, for the purposes of infringement law, two producers can adopt and use the same trademark, so long as they use the mark on different goods, in different markets, or in different places. And while courts ask whether the defendant acted in “good faith in adopting its own mark,”[139] bad faith, standing alone, is not enough to support the imposition of liability. Instead, courts inquire into the existence of competitive harm: In making purchasing decisions, are consumers likely to be misled as to which product comes from which source, so as to deprive the trademark owner “of the profit he might make through the sale of the goods which the purchaser intended to buy”?[140]
Professor Patterson once observed that “[t]he law of copyright can be viewed most usefully as statutory unfair competition” because the law “function[s] … to protect the copyrighted work against predatory competitive practices.”[141] Indeed, copyright law and the law of unfair competition (including trademark law) have a number of things in common. Both bodies of law provide producers with a limited property right as an inducement to invest in the production or use of intangibles that benefit the public. As we have seen, copyrights benefit the public by “promot[ing] the Progress of Science”[142] in several important ways. And while Congress does not wish to encourage the proliferation of trademarks per se, trademarks benefit the public by enabling consumers to distinguish between goods sold by rival producers.
While these similarities are significant, there also are a number of differences between copyright law and trademark law. Among the most significant of these is the degree to which the creation and invasion of each property right depends on whether parties engage in what one might describe as “public acts.”[143] Take the creation of rights first: Under copyright law, if a producer wishes to obtain rights, he or she must either create an “original work[ ] of authorship fixed in any tangible medium of expression”[144] or negotiate a transfer of copyright from somebody who has created one.[145] Both of these acts can be conducted entirely in private, and indeed they often are. Most of the time, the public has no idea that somebody, somewhere has created or purchased or licensed a copyrightable work. These “covert” events (for want of a better word) only impact the public when a copyright owner decides to publish his or her work, by which time the property right already exists. By contrast, under trademark law, a producer wishing to obtain rights in a mark must engage in the “bona fide use of [that] mark in the ordinary course of trade,”[146] which trade ordinarily is “overt,” whether on the wholesale or retail level. When producers have tried to obtain rights in marks by engaging in private acts, courts have rejected those efforts as “bad faith attempt[s] to reserve a mark.”[147]
The two bodies of law also diverge when it comes to the invasion of rights: A person can infringe a copyright by engaging in an entirely private act, for section 106 provides copyright owners with “the exclusive right[ ] … to reproduce the copyrighted work in copies,” regardless of where that reproduction takes place.[148] To be guilty of infringement under section 32(1) of the Lanham Act, however, a person must use a confusingly similar mark “in commerce … in connection with the sale, offering for sale, distribution, or advertising of … goods.”[149] One body of law accords legal significance to private acts; the other, on the whole, does not. This difference seems odd when one considers that both bodies of law are designed to “protect the copyrighted work against predatory competitive practices.”[150] Competition, by definition, occurs in the marketplace, which is a uniquely public (i.e., overt) institution.
Copyright law used to accord more significance to public acts than it does today.[151] Until January 1, 1978, the effective date of the Copyright Act of 1976, creators obtained rights under the federal statute only when they engaged in the act of general “publication,” which happened when at least one member of the general public obtained at least one copy of the work without being restricted from further distributing it. In most cases, this meant that rights were created upon “publication in print.”[152] In 1976, however, Congress revised the statute to provide for the creation of rights at the moment a work was “fixed in any tangible medium of expression,”[153]—whether that work was published or not. As I have noted elsewhere, this “fundamental”[154] change meant an explosion in the number of copyrightable works, “fixed works being far more numerous, by definition, than published works.”[155] But it also meant that for the first time, exclusive rights could be created in private, giving the public no way of knowing whether, and when, those rights were being created.
Further, if copyright law now punishes violations of property rights done in private, this was not always the case. Congress only added the word “copy” to the list of exclusive rights in the statute on July 8, 1870, when Congress extended the copyright to works of the fine arts.[156] Before that date, copyright owners had enjoyed only the exclusive rights of “printing, reprinting, publishing and vending” copies of their works.[157] Professor Patterson believed that Congress inserted the word “copy” intending it to apply only to works of the fine arts,[158] which would mean that most copyright owners enjoy the exclusive right of reproduction only by accident. Regardless, given the bundle of rights that copyright owners now hold, the invasion of rights—like the creation of rights—has, in many cases, become a private act.
How might copyright law function if it concerned itself only with those invasions of the property right that threatened to cause competitive harm? It bears noting, first, that “competitive harm” does not mean harm of any kind. Under the antitrust laws, courts require injured parties to demonstrate that their injuries were caused by an anticompetitive practice “‘of the type the antitrust laws were intended to prevent,’”[159] such as predatory pricing.[160] Because “[t]he antitrust laws … were enacted for ‘the protection of competition not competitors,’ …. [i]t is inimical to the purposes of [those] laws to award damages for the type of injury” that flows merely from vigorous competition.[161] The law of unfair competition imposes a similar requirement. According to the Restatement, “the freedom to compete necessarily contemplates the probability of harm to … other participants in the market,”[162] as when, for example, a producer lowers prices, raises quality, or otherwise satisfies consumer desires better than its rivals do. The law exists to remedy only those “harm[s] resulting from particular methods of competition determined to be unfair,” including trademark infringement and other practices likely to have a negative impact on the public.[163]
Copyright law, too, holds that some harms are not cognizable because they flow from acts of fair competition. As the Supreme Court pointed out in Campbell v. Acuff-Rose Music, Inc.,[164] the fact that a parody may suppress demand for the original does not make the use “unfair.” According to the Court, “the only harm” with which courts need concern themselves “is the harm of market substitution.”[165] Echoing this language, a number of courts have suggested that substitutive works cause competitive harms, while complementary harms do not.[166] As Judge Richard Posner observed in Ty, Inc. v. Publications Int’l, Inc.,[167] “copying that is complementary to the copyrighted work (in the sense that nails are complements of hammers) is fair use, but copying that is a substitute for the copyrighted work (in the sense that nails are substitutes for pegs or screws) … is not fair use.”[168] “If the price of nails fell,” he wrote, “the demand for hammers would rise …. The hammer manufacturer wants there to be an abundant supply of cheap nails.”[169]
The problem with this argument is that, unlike hammers and nails, copyrighted works can change in form and substance, giving them the ability to exist in several markets at the same time. As Judge Posner recognized, copyright owners want courts not only to enjoin those copies that substitute for their works, but also those copies that “substitute … for derivative works from the copyrighted work.”[170] In other words, copyright owners want exclusivity not only in the existing markets for their works, but also in derivative markets they may (or may not) develop in future.[171] In Ty, the owner of copyrights in Beanie Babies wanted to control not only the market in Beanie Babies themselves, but also the market in photographs of Beanie Babies, as well as the market in books about Beanie Babies. Judge Posner elided the derivative markets issue by holding (I think) that at least some of the books about Beanie Babies were not “derivative works”[172]—thus answering a slightly different question than the one he had asked. He also declined to address the question whether Ty was engaging in copyright misuse by using its copyrights to squelch criticism of the company.[173]
But if courts can (and do) elide these issues, somebody must consider them. By failing to define the “relevant markets” in copyrighted works, lawmakers are giving copyright owners the power to define the scope of their own property rights by enabling them to occupy those markets in which they wish to exercise exclusivity. The result is similar to what would happen if courts gave monopolists the power to define the relevant market in antitrust law: If the market were defined broadly enough, even Microsoft would have an insignificant share of it. Similarly, in copyright law, if the market for a copyrighted work were defined broadly enough, every unauthorized use of that work would give rise to infringement liability because every such use would be “competing”—whether in “original” or derivative markets. The result would be a copyright law that provided creators with plenty of inducement to create (in the form of exclusive rights) but that neglected the values of access to copyrighted works, open and populous markets in copyrighted works, and diversity of expression. In other words, the result would be the copyright law we have today.
How might lawmakers define (and confine) the relevant markets in copyrighted works? The answer is not to ask, as lawmakers have done, whether giving creators this or that exclusive right in this or that market would provide them with an enhanced inducement to create. As I have argued elsewhere, changes in the law have conditioned creators to expect an increasing reward for engaging in the act of creation—and creators have formed incentives accordingly.[174] “Lawmakers hasten to safeguard those incentives by granting more rights. Those rights, in turn, create higher expectations among creators,” and the result is a cycle in which the property right grows increasingly broad.[175] The only way to escape the cycle is for lawmakers to ask not what creators have come to expect in the way of rights, but what creators are entitled to expect given the nature of the public interest in copyright.[176]
The rights that creators are entitled to expect are likely to vary with the type of work at issue because the public interacts with different types of works in different ways. Consider the case of works that exist in a single copy, such as original paintings and sculpture: For many “collectors of fine art, there [is] no substitute for the original,” making the relevant market in those works so narrow that the benefits of copyright might not be worth the costs of granting protection.[177] The opposite is true of works created for the purpose of existing in multiple copies, or what I have termed “printed works.”[178] Books are a prime example of these: Most authors write books so that others might pay to read them. In order to accomplish this goal, authors make (or authorize) copies of those books and distribute those copies to the public. Copyright law enables authors and their publishers to turn a profit by prohibiting others from marketing the fruits of creative processes in which they did not invest. The expectation that such a profit is possible acts as an inducement to more creation, both by existing authors and future ones.
There are, of course, other reasons why people create. Some of those reasons might have nothing to do with money—as if, for example, authors were motivated to write books in the hopes of becoming famous, or in the hopes of using copyright law to keep others from criticizing or ridiculing their work. Other motivations might be more mercenary: Authors might write books hoping to make money by writing sequels, or by having their books made into movies. Authors might write books so they can demand a royalty whenever (a) their books are sold by used bookstores or loaned by libraries, (b) their books are shared among friends, (c) their books are read aloud on the radio, in concert halls, on street corners, (d) their books are displayed on television, in bookstores, on public streets. As strange as it may seem, some authors might even be motivated to write books so they can get paid when a computing company (like Google) decides to scan their books and make the resulting digital images searchable on the Internet.
But just how relevant is each of these motivations? As we have seen, some types of harms are not “competitive harms,” such as the harms that arise when copyrighted works are subjected to criticism or ridicule. Thus, even if some authors would not create without being granted the right to exclude these uses, copyright law does not (and should not) respond by providing an inducement here. Similarly, other authors might be motivated to create by the prospect of excluding uses that might not be part of the “relevant market” in books—which is another way of saying that satisfying those expectations of reward might not serve the public interest. Rights under copyright should be granted or withheld so as to benefit the public, and as we have seen, this benefit does not always “coincide[ ] ... with the claims of individuals.”[179]
If lawmakers wished to define the “relevant market” for printed works, they could not do so without deciding what creators of printed works are entitled to expect, but in pursuing this inquiry, one might reasonably begin by asking what most people actually expect to gain by creating. Even if this is an empirical question, one suspects that at least some of the answers are obvious: First, a significant percentage of people create in the hopes of releasing copies of their works (and to a lesser extent, derivatives of their works) to the public in return for money. Second, the only way for those creators to make money is by distributing those copies or derivatives to interested members of the public.[180] Third, it would do those creators no good to print copies or create derivatives of their works without distributing them. The value contained in a warehouse of books, or posters, or movies depends almost entirely on what the public might pay for those things upon their release. In short, most people create primarily because copyright law provides them with the exclusive right of public distribution. It is no accident that Congress once conditioned the grant of statutory protection on the fact of publication; “intellectual conceptions benefit the public only when they are released.”[181]
Like every other right in property, the exclusive right of public distribution has its limits. Notwithstanding the fact that at least some people might create so as to earn a royalty every time a copy of their work changes hands, Congress has determined that creators are not entitled to expect those royalties, at least insofar as authorized copies are concerned. Almost exactly a century ago, Congress limited the public distribution right in section 41 of the Copyright Act of 1909, providing that copyright owners cannot “forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained.”[182] The first public distribution of a work in copies exhausts the distribution right as to those copies. This limitation, known as the “first sale doctrine,” appears in substantially the same form in section 109(a) of the Copyright Act of 1976.[183] In adopting this limitation, Congress believed that the first sale doctrine would benefit society (e.g., by providing more in the way of access) than the doctrine would harm it (e.g., by providing less in the way of inducement). Accordingly, Congress defined the relevant market in printed works so as to encourage competitors to engage in the further distribution of “lawful[ ]” copies that already had reached the public.
If copyright law concerned itself only with those invasions of the property right that threatened to cause competitive harm in this market, the law would continue to provide copyright owners with the exclusive right to release copies (and perhaps, derivatives) of their works to the public. It would not, however, provide copyright owners with the exclusive rights of reproduction and adaptation because the acts of reproduction and adaptation are not anticompetitive, standing alone. Professor Patterson once described the right to copy as “a predicate right”;[184] that is, one cannot distribute copies of a work to the public without making those copies in the first place. The same might be said of the right to make derivative works: One cannot distribute derivatives of a work to the public without making those derivatives in the first place. The act of public distribution requires a predicate act of reproduction or adaptation, but acts of reproduction and adaptation can (and indeed, do) happen without the results being distributed to the public.
This is not to say that acts of unauthorized copying might not deprive copyright owners of opportunities to charge for access to their works—as when, for example, friends send each other electronic copies of songs they purchased, hoping to share an experience.[185] But these are relevant harms only in a world in which copyright owners are given the right to exclude every use, however beneficial to the public. Copyright law does not (and should not) exist to internalize every externality that impacts the public in a positive way. To quote Professor Mark Lemley, “part of the point of intellectual property law is to promote uncompensated positive externalities, by ensuring that ideas and works that might otherwise be kept secret are widely disseminated.”[186] Indeed, as Professor Lemley has observed, giving copyright owners the right to capture the value of every use (i.e., to eliminate freeriding) would impose significant costs—not only on society, but also on creators themselves.[187]
Suppose that section 106 of the Copyright Act were amended to replace subsections (1) through (3)[188] with a provision granting to copyright owners “the exclusive right[ ] … to distribute copies or derivatives of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” Suppose further that section 109(a) were amended to provide that “the owner of a particular copy or derivative … made by authority of the copyright owner… is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or derivative…” In providing creators with the distribution right (but not the reproduction and adaptation rights), lawmakers would permit copyright owners to capture the values in some uses without forcing the public to sacrifice other interests that the law was meant to promote.
Creators would enjoy the exclusive right to release copies (and perhaps, derivatives) of their works to the public, but they could not control the later distribution of those copies and derivatives. Creators could not prevent others from copying or adapting their works, but they would have the right to exclude those (unauthorized) copies and derivatives from the marketplace; the first sale doctrine would exempt from liability only those acts of public distribution involving “cop[ies] or derivative[s] … made by authority of the copyright owner.” “Private” distribution, for its part, would continue to be perfectly legal, thus enabling members of the public to share copies and derivatives of copyrighted works within the “normal circle of … family and … social acquaintances.”[189] Creators would continue to enjoy a significant amount of inducement; the public would enjoy a significant amount of access to copyrighted works; and the law would provide the public with a number of other significant benefits, to which I now turn.
III. On the Utility of Copyright as Trade Regulation
A. Solving the “Problem” of Personal Copying
Most copyright scholars agree that almost nothing poses a greater threat to the enterprise of creation than the “problem” of unauthorized copying. To quote Professor Marshall Leaffer, the “‘copying problem’ presents challenges that transcend qualitatively anything in history, and the economic stakes are greater than ever.”[190] Solutions abound. After detailing eight ways in which scholars have proposed to solve the “copying problem,” Professor Peter Yu has suggested that lawmakers use “a combination of these proposals,” although he warns that there is “no panacea.”[191] As I have argued, of course, one might solve the copying “problem” by amending the Copyright Act to withhold the exclusive right of reproduction entirely. According to Professor William Patry and Judge Posner, however, this “would be the undoing of copyright.”[192] Why?
Scholars have competing theories as to why copying threatens the enterprise of creation. One theory (to which Patry and Posner subscribe)[193] is that copying forces a reduction in prices of copies of copyrighted works, thus depriving copyright owners of profits and reducing their incentives to create. As Professor Raymond Ku has observed, “[i]f competition from copiers drives the price of a work down to the marginal costs of the copier, it threatens the incentives to distribute the work in the first place.”[194] Even Professor Lunney, who advocates some private copying, has warned that instances of private copying, “[a]lthough individually trivial, … in the aggregate could radically reduce the incentive to create any given work of authorship.”[195]
In fact, however, acts of copying, standing alone, would not produce these results. Only the distribution of unauthorized copies would tend to increase supply, thus decreasing prices (at least in a competitive market). Further, only the public distribution of unauthorized copies would tend to increase supply enough to have any appreciable effect on prices. The “private” distribution of unauthorized copies might deprive copyright owners of at least some profits as consumers shared purchased copies within “normal circle[s] of … family and … social acquaintances.”[196] But given how broadly the courts have construed the statutory definition of “publicly,” private distributions are likely to involve relatively few copies, which means that any lost profits would be unlikely to have a significant effect on the inducement to create. This may be why “[c]opyright owners in the twentieth century sued counterfeiters but generally did not sue end users even if they were making illegal copies”:[197] the benefits of enforcement did not justify the costs.[198] Unfortunately, this approach seems increasingly anachronistic.[199]
If copying is thought to pose more of a threat to copyright owners today, it is because technological advances are enabling copyists to make “perfect copies” (and “perfect copies of the copies”) at “massive[ly] declin[ing]” costs.[200] As before, however, the problem is not reproduction, but distribution. The most significant impact of advancing technology has been the transformation of consumers into public distributors. With the click of a mouse, a person can use his or her computer to send thousands of “perfect copies” of copyrighted works to thousands of strangers, or to make those copies available for downloading by thousands more. In the old days, that kind of distribution required a significant amount of investment, and the resulting barriers to entry created the very oligopolies that are so quick to blame reproduction technologies for their problems today.
A second theory as to why copying causes harm is that copying forces copyright owners to raise the prices of copies of their works, thus injuring the consuming public. To quote Professor Trotter Hardy, “[p]rices would be lower in the absence of copying,”[201] presumably because competition from copyists is thought to lead to fewer sales for copyright owners, forcing those copyright owners to boost revenues by charging higher prices. If copyright owners were losing market share to copyists, however, then raising prices would be the wrong way to go. Copyright owners who insisted on charging higher prices in such a market would, in the end, be forced either to reduce their prices or to watch their market share erode considerably. Regardless, it would be unfair to blame copying alone for competitive harms like these. Consider an example from the music industry: If record companies decided, finally, to give consumers the (legal) opportunity to download individual songs at reasonable prices, it was only because online “distributors” forced those companies to change the way in which they distributed music. A guy in his basement can copy thousands of copyrighted songs onto his hard drive, but only when he distributes those copies to the public does he inflict competitive harm on copyright owners. Record companies may love the reproduction right because it enables them to threaten litigation against (and thus frighten away) as many members of the public as possible,[202] but this is not a good enough reason to retain a right that Professor Julie Cohen has described as “recogniz[ing] few boundaries”—“drafted extraordinarily broadly in the first instance, and … extended even more broadly by the courts.”[203]
If the “predicate”[204] right of reproduction provides copyright owners with few benefits, there are significant public benefits to be gained by withholding it. First, as we have seen, giving members of the public the right to make copies (and derivatives) of copyrighted works would increase access to those works during the copyright term without subjecting copyright owners to the kind of unfair competition that might reduce their incentives to create. That “access,” in turn, would lead to the creation of thousands of tangible copies—copies the creation of which the law now seeks to prevent (and punish). There are, of course, significant archival benefits to be gained by the proliferation of tangible copies,[205] but I have argued that the proliferation and distribution of copyrighted works in tangible form also promotes the enterprise of learning. In fact, copyright law always has recognized this.[206] Article I, Section 8, Clause 8 of the Constitution gives Congress the authority to provide authors with exclusive rights only in “Writings,”[207] and accordingly, Congress has defined copyrightable works as those “original works of authorship fixed in any tangible medium of expression.”[208] If the fixation requirement serves other purposes—including evidentiary ones[209]—it also provides the public with a tangible benefit in return for the impediment to access that the grant of exclusive rights represents.[210]
Granting the public access during the copyright term also might promote expressive diversity in surprising ways. To the extent the law requires members of the public to be “consumers” instead of “users,” copyright owners can train the public to satisfy its demand for expression by looking to the copyright industries alone. As Professor Benkler put it (using Disney as an example), “increased prevalence of Mickeys should lead to increased investment in forming preferences for their products. This should increase relative demand for their products. Repackaging the Mouse becomes not only cost effective, but also responsive to demand.”[211] In time, the public tends to forget that the copyright industries are not the only sources of creative expression. If, however, the public enjoyed the right not only to “experience” copyrighted works[212] but also to make copies and derivatives of those works for private use, people might begin to interact with copyrighted works in ways that raised the “common denominator,”[213] at least in their own lives (and the lives of family and friends.) Meaningful access to creative works inspires creativity. Further, if the public began to view copyrighted works not only as finished products, but as raw materials, demand for those works might even increase. So might the value of the copyrights themselves, as users sought to license the right to market their improvements.
Perhaps the most significant benefit of withholding the exclusive right of reproduction, however, relates to derivative liability. Since the Supreme Court grappled with the issue of contributory liability in Sony Corporation of America v. Universal City Studios, Inc.,[214] copyright owners have brought copyright infringement actions against manufacturers of copying technologies that enable computers to engage in unauthorized acts of reproduction. In Sony, the Court held that under the “staple article of commerce” doctrine, “the sale of copying equipment … does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes.”[215] “Indeed,” the Court added, that product “need merely be capable of substantial noninfringing uses.”[216] In the last twenty years, however, copyright owners have convinced courts repeatedly to distinguish the holding in Sony, and the Court itself did so last year.[217] These days, manufacturers of copying devices may be guilty of contributory infringement if they distribute those devices “with the object of promoting [their] use to infringe copyright”[218]—even if those devices are “capable of substantial noninfringing uses.”[219]
Scholars, too, have struggled with issues of derivative liability, which have become particularly pressing as “digital technologies involve copying as part of use …”[220] To quote Professor Jessica Litman, “[d]efining an appropriate boundary between contributory infringers and innovators in digital technology seems even more crucial today than it did when the Court decided Sony.”[221] Although that boundary promises to remain elusive, it certainly cannot be drawn if acts of copying alone are punishable as copyright infringement.
If the goal is to promote both acts of creation and acts of technological innovation, then withholding the exclusive right of reproduction could help to achieve that goal in at least some cases. If copyright owners did not have the right to exclude others from copying their works, then by definition, they could not bring infringement actions against manufacturers of copying technologies (like the one in Sony) for enabling those acts of copying. Liability for contributory infringement derives from acts of direct infringement, which means there can be no derivative liability absent a violation of the Copyright Act.[222] The benefit of withholding the reproduction right would be obvious for manufacturers of devices, such as computers, that cannot function without making copies. But that benefit also would be obvious for consumers, who would have the opportunity to purchase those copying technologies without funding payments of royalties. In the end, contributory liability would continue to be a threat only to those companies (like Napster and Grokster) that enable and “induce”[223] users to engage in the public distribution of unauthorized copies (or derivatives) of copyrighted works, thus causing competitive harm. If this is not a perfect boundary “between contributory infringers and innovators in digital technology,” it certainly is an “appropriate” one.[224]
B. Preempting the End Run Around Copyright
If copyright owners have used the copyright law to force third parties to police infringements of their works, copyright owners also have used other laws to control the way in which the public interacts with their works: first, by seeking to enforce restrictive “end user license agreements,” mostly for computer software, under contract law; and second, by persuading lawmakers to enact new laws (such as the Digital Millennium Copyright Act)[225] prohibiting users from circumventing the encryption of copyrighted works—even in purchased copies.[226] Scholars have characterized both of these “end runs” around copyright as serious, even devastating blows to the public interest in copyright, in part because neither contract law nor anticircumvention law makes exception for fair uses of copyrighted works.[227] As Professors Dan Burk and Julie Cohen have articulated the problem, “[w]here technological constraints substitute for legal constraints, control over the design of information rights is shifted into the hands of private parties, who may or may not honor the public policies that animate public access doctrines such as fair use.”[228]
Notwithstanding the importance of these public policies, most courts have upheld efforts to enforce exclusive rights by means of contractual or technological controls. In ProCD, Inc. v. Zeidenberg,[229] for example, the court was asked to consider the enforceability, under contract law, of a “shrinkwrap” license prohibiting buyers from engaging, inter alia, in the public distribution of databases containing telephone directories. (The public distribution of those databases would not constitute copyright infringement because under section 102(b) of the Copyright Act, “in no case does copyright protection … extend to any [such] discovery.”)[230] Writing for the court, Judge Frank Easterbrook held that the Copyright Act (in section 301(a)) did not preempt the enforcement of that license under contract law because the “rights created by contract [were not] ‘equivalent to any of the exclusive rights within the general scope of copyright.’”[231] As for technological controls, the Second Circuit Court of Appeals held in Universal City Studios, Inc. v. Corley[232] that the prohibition in section 1201(a) of the Digital Millennium Copyright Act neither is subject to the fair use provisions of section 107 nor is required to be.[233] As the court observed, “We know of no authority for the proposition that fair use, as protected by the Copyright Act, much less the Constitution, guarantees copying by the optimum method or in the identical format of the original.”[234]
These decisions contain echoes of grievance, as if courts perceive the rights under copyright law to be inadequate to punish invasions of the property right, most of which involve acts of copying. The result is a general “law of control” that violates the spirit, if not the terms, of the Copyright Act in section 301(a), which provides that those “legal and equitable” rights equivalent to copyright are to be “governed exclusively by this title [17].”[235] On the subject of contractual controls, many scholars have urged courts to invigorate this doctrine of preemption,[236] but the solution is not without its problems: How much of the state law on contracts do federal courts have the stomach to preempt? As Professor Lemley put it, “Using preemption doctrine against contracts is something like swinging a sledgehammer at a gnat: you are likely to hit the target, but you may do some serious damage to the things around it.”[237] Worse, perhaps, “you might decide not to swing the hammer at all, for fear of hitting the wrong thing.”[238] If preemption is tricky, try this solution to the problems posed by technological controls: Professors Burk and Cohen have suggested that the federal government create (and fund) an “escrow agent” whose sole job would be to issue “keys,” case by case, to users who could demonstrate a need for access to encrypted works.[239] It would be far simpler, of course, to enact “an explicit … fair use exemption from the anticircumvention provisions” of section 1201, as Professor Benkler has suggested.[240] As we have seen, however, fair use has its problems, too.
Amending the copyright statute to withhold the exclusive right of reproduction would do what these proposals would not: It would eliminate much of the claimed need for access controls by erasing many of the “harms” thought to justify those controls in the first place. Consider the Digital Millennium Copyright Act: Both the House and Senate Reports issued in support of passage contain language to the effect that the Act is necessary because of the threats posed by unauthorized acts of both reproduction and distribution. The language in the Senate Report is typical: it provides that “[d]ue to the ease with which digital works can be copied and distributed worldwide virtually instantaneously, copyright owners will hesitate to make their works readily available on the Internet without reasonable assurance that they will be protected against massive piracy.”[241] Of the two rights, however, the reproduction right has drawn the most notice. In describing the respective provisions of sections 1201(a) and 1201(b), for example, the Senate Report instructs that section 1201(b) is meant to “prohibit[ ] devices primarily designed to circumvent … measures that limit the ability of the copyrighted work to be copied, or otherwise protect the copyright rights of the owner of the copyrighted work.”[242] In Corley, too, the court focused almost exclusively on the threat posed by copying. It did so, in part, by remonstrating “pirates” and “thieves,” whom it described as those “who want to acquire [i.e., copy] copyrighted material (for personal use or resale) without paying for it.”[243]
If the exclusive right to make copies were not among those rights listed in section 106 of the Copyright Act, then it would not be a wrongful act to make copies of copyrighted works, so long as one did not also distribute those copies to the public. Whither the rhetoric about piracy and thievery? Copyright owners, of course, would continue to ask lawmakers to provide them with protection against circumvention of those technologies designed to hinder distribution; they may even continue to demand hindrances to copying; but one hopes, at least, that lawmakers would hesitate to grant copyright owners the right to prohibit the public from engaging in acts of copying that would be perfectly lawful under copyright law, in the service of which the Digital Millennium Copyright Act was enacted in the first place.[244] Of course, if Congress were to amend section 1201(a) of the Act to prohibit the circumvention of only those measures that “effectively control[ ] the public distribution of a work protected under [title 17],” it probably would not stop copyright owners from using technological measures to prevent copying, if they could. But it also would not stop users from using technological measures of their own. As Professor Cohen has argued, “Copyright owners cannot be prohibited from making access to their works more difficult, but they should not be allowed to prevent others from hacking around their technological barriers.”[245] This solution is only as good as the hackers that might provide it, but it may be good enough (for now).
In case of contracts, too, withholding the exclusive right of reproduction would deprive copyright owners of many of their justifications for imposing restrictive terms on purchasers of copies (e.g., of software). Copyright owners likely would continue to require users to agree not to engage in acts of copying. Because copying alone would be perfectly legal, however, copyright owners would be guilty of using contracts not to enhance their rights under copyright law, but to create new ones. This effort to deny the public the benefits of “legalizing” reproduction would present a strong case for preemption, for as the Supreme Court warned in Sears, Roebuck & Co. v. Stiffel Co.,[246] “[w]hen state law touches upon the area of [the copyright and patent] statutes, it is ‘familiar doctrine’ that the federal policy ‘may not be set at naught, or its benefits denied’ by the state law.”[247] But even if courts would be hesitant to use the “coarser tools” of preemption, Professor Lemley has argued that the “better tool” might be the doctrine of copyright misuse.[248] “Copyright misuse” consists of the “attempted use of a copyright” either “in a manner violative of antitrust law … or in a manner violative of the public policy embodied in the grant of a copyright”—as if, for example, a licensor attempted to prevent its licensee from implementing the (unprotectible) ideas expressed in the licensed works.[249] Contract terms that sought to prevent licensees from exercising their right to engage in copying sans public distribution likewise would “violat[e] … the public policy embodied in the grant of a copyright,” and therefore would render the offending copyright unenforceable “‘during the period of misuse.’”[250] Again, this would not be a perfect solution, but it would result in a more equitable balance between “the claims of individuals” and “[t]he public good.”[251]
C. Breathing Life into the Fair Use Defense
If, as Professor Patterson argued, the “question is not ‘what is fair use?’ but ‘what is copyright?’,”[252] then one cannot make sense of fair use without first deciding, as Professor Litman put it, “what we have a copyright law for.”[253] Not surprisingly, there is a lack of agreement on this point. While two hundred years ago, copyright may have been a modest instrument of quid pro quo, today the “grand conception”[254] of copyright no longer can satisfy the demands that its many constituencies have placed upon it. Professor Lunney may have described the doctrine of fair use as “a central and vital arbiter between two competing public interests”[255]—namely, inducement and access—but in fact, that doctrine has been assigned a minor role in the drama of copyright.
There are two reasons for this: First, an influential group of scholars has succeeded in convincing many courts that the public interest is best served when rights in copyrighted works can be acquired and parceled and sold as if they were tangible property.[256] The resulting commodification of creative expression is thought to serve the purposes of copyright law by enabling the market to distribute that expression to more people than it otherwise might reach. Scholars who embrace this principle argue that “the market,” as opposed to the government, is best equipped to locate the most productive ways in which to exploit copyrightable works.[257] As Professor Wendy Gordon once wrote, the primacy of the market means that fair use should exist only when the commodities market in expression “fails,” either because transactions costs are too high to facilitate a transaction or because there is reason to believe that no market exists in the first place.[258] If, in time, computer technology enables transactions with the click of a mouse, then fair use must shrink, as must the power of the government to diminish the rights that copyright holders enjoy. In the words of Professor Paul Goldstein, “For the great bulk of uses previously excused because of transaction costs, the doctrine will simply become irrelevant.”[259]
The second reason for the marginalization of fair use is that a distinguished jurist has succeeded in convincing his fellow judges that the doctrine should be reserved for “transformative” works—that is, derivatives that “add[ ] value to the original … in the creation of new information, new aesthetics, new insights and understandings.”[260] Ironically, Judge Leval proposed this test so that fair use would “not be considered a bizarre, occasionally tolerated departure from the grand conception of the copyright monopoly.”[261] It has not worked out that way. “Courts now feel obliged to discuss the plausibility of virtually all fair use claims, at least in the first instance, in terms of whether or not they involve transformative uses.”[262] Not surprisingly, for litigants, the name of the game is to redefine “transformative” as the facts of the case demand, rendering the concept increasingly meaningless.[263] Meanwhile, it never was that much of a guide to begin with. As Professor Lloyd Weinreb has pointed out, “[a] use may serve an important, socially useful purpose without being transformative, simply by making the copied material available.”[264] The Google case is a perfect example of this.
The problem underlying both of these interpretations of “fair use” is that the property rights to which it makes exception have grown increasingly, even unmanageably broad. As those rights have broadened, courts have come under increasing pressure to preserve the “breathing space within the confines of copyright.”[265] But the doctrine of fair use alone cannot provide that “breathing space.” For one thing, there are too many reasons why courts might wish to confine the property right for one doctrine to account for those reasons in any coherent way.[266] For another thing, the fourth factor in section 107—“the effect of the use upon the potential market for or value of the copyrighted work”—prevents courts from disappointing existing expectations to any significant degree. Over time, copyright owners have come to believe that they are, indeed, “ordinarily entitled to revenue for all substantial uses of [their] work[s] within the statutorily protected categories.”[267] Having come to expect to enjoy that property right (and those revenues), copyright owners form incentives to create accordingly.[268] Thus, it does not help to say that courts should find fair use “[w]hen no incentive purpose would be served by giving plaintiff protection, and where no disincentive would be created by allowing defendant free use.”[269] Increasing the reach of the fair use doctrine itself would create such a “disincentive,”[270] thus trapping the defense in a circularity of expectation.
The solution to the problem of fair use is to make the defense less central to the enterprise of creation, not more.[271] The problem with fair use is not that the defense is too narrow, but that the rights to which it makes exception are too broad. Say Congress were to narrow these rights by amending section 106 of the Copyright Act to give copyright owners only “the exclusive right[ ] … to distribute copies or derivatives of the copyrighted work to the public …”[272] Acts of copying, standing alone, would not constitute prima facie infringement, and therefore acts of copying, standing alone, would be legal without resort to the fair use defense. This would be of obvious benefit to Google and its Library Project: While Google has reproduced copyrighted works in their entireties, it has not provided the public with anything more than a few “snippets” of those works, rendering any public distribution de minimis. In other words, because Google has not caused the publishers any competitive harm in the relevant market (here, in books), its actions would not violate section 106 as amended. The publishers being unable to make a prima facie case of copyright infringement, Google would prevail without having to invoke the fair use defense, and without having to argue for a tortured interpretation of the word “transformative.”
If the Copyright Act had looked like this in 1976, when Universal Studios sued Sony in the district court,[273] then Universal, too, would have failed to make its prima facie case because Sony was accused of contributing to acts of copying, not acts of distribution.[274] Universal having failed to prove copyright infringement, Sony would not have pressed the fair use defense; the Supreme Court would not have grappled with the question whether home taping of television programs was “fair”; Justice Powell, who “felt that home use should be deemed fair use,” would not have cobbled together an opinion to that effect;[275] litigants and judges and scholars would have been spared the burden of trying to distinguish or breathe life into the holding in Sony; and hundreds of copyright articles never would have been written. Some of these things might not be benefits, of course; I leave it for the reader to decide.
Conclusion
In this Article, I have argued that in the name of “encourag[ing] … learning” by inducing acts of creation, lawmakers are using copyright law to satisfy demands for private rights at the expense of other public interests in copyright. Those other public interests include, of course, public access to copyrighted expression, but they also include open and populous markets in expression as well as expressive diversity. At times, some of these interests may conflict: Giving creators (and their assigns) the right to exclude the public from using copyrighted works necessarily would inhibit at least some access; and promoting free competition in the market for copyrighted works likely would undermine the inducement of creation. I have proposed to mediate these conflicts by conceiving of copyright law as a prohibition against acts of unfair competition, whether by producers or consumers.
Under this conception, copyright infringement would consist of the infliction of “competitive harm” in a “relevant market,” which terms I have proposed to define by asking what rights creators are entitled to expect to enjoy when they engage in the act of creation. Those rights would vary by type of work. As regards “printed works” (i.e., works created for the purpose of existing in more than one copy), I have argued that creators are not entitled to expect the right to exclude others from engaging in acts of private copying (or adaptation), which acts, standing alone, do not act as market substitutes to any significant extent. Instead, I have argued that those creators are entitled to expect only the exclusive right to distribute copies (and perhaps, derivatives) of those works to the public—as if, for example, section 106 of the Copyright Act were to provide copyright owners only with “the exclusive right[ ] … to distribute copies or derivatives of the copyrighted work to the public …” As Professor Patterson once put it, “if copyright encourages creation, it does so only for the purpose of profit,” which profit “cannot be obtained without distribution.”[276]
Because this profit depends on public distribution, acts of public distribution are public behaviors that threaten to cause competitive (i.e., public) harms. But acts of copying are not. For too long, lawmakers have sought to punish private behaviors (like acts of copying) on the theory that copyright exists to maximize the earnings and therefore the incentives of the producers who subsidize acts of creation. As we have seen, however, copyright exists primarily to provide the public with meaningful access to diverse forms of expression from an abundance of sources. Google is proposing to provide such meaningful access, and there are thousands of other “ordinary user[s]”[277] who might provide such diversity and abundance. The only thing standing in their way is a copyright law that attaches legal significance to public and private acts alike, regardless of the impact of those acts on the market in copies of copyrighted works. It is time for lawmakers to conceive of copyright law not as a means of granting property rights, but as a means of using property rights to promote fair competition in the marketplace of expression.
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* B.A., Emory; J.D., Virginia, Associate Professor of Law, Emory University School of Law. I am very grateful to my colleagues Thomas C. Arthur, Michael S. Kang, William T. Mayton, Robert A. Schapiro, and George B. Shepherd for providing me with their comments on an earlier draft of this Article.
[1] 17 U.S.C. § 107.
[2] Professor Wendy Gordon articulated this theory more than twenty years ago, and her work has inspired dozens of response—too many to cite here. See Wendy J. Gordon, Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessors, 82 Colum. L. Rev. 1600, 1616 (1982) (“[F]air use implies the consent of the copyright owner by looking to whether the owner would have consented under ideal market conditions.”).
[3] See Wendy J. Gordon, Excuse and Justification in the Law of Fair Use: Transaction Costs Have Always Been Only Part of the Story, 50 J. Copyright Soc’y U.S.A. 149, 155, 155 (2003) (noting that the “excuse” type of fair use “should and does disappear if, because of institutional or technological change, the excusing circumstances disappear”); Jane C. Ginsburg, From Having Copies to Experiencing Works: the Development of an Access Right in U.S. Copyright Law, 50 J. Copyright Soc’y U.S.A. 113, 125 (2003) (“[T]he ‘market failure’ genre of fair use should fade away in a world of perfect price discrimination ...”); Diane Leenheer Zimmerman, The More Things Change The Less They Seem “Transformed”: Some Reflections on Fair Use, 46 J. Copyright Soc’y U.S.A. 251, 265 (1998) (“Implicit in Professor Gordon’s approach to fair use, however, is an element of temporal instability …”) (citing Gordon, supra note 2).
[4] See Paul Goldstein, Fair Use in a Changing World, 50 J. Copyright Soc’y U.S.A. 133, 137 (2003) (“For the great bulk of uses previously excused because of transaction costs, the [fair use] doctrine will simply become irrelevant.”).
[5] See Wendy J. Gordon, Fair Use: Threat or Threatened?, 55 Case W. Res. L. Rev. 903, 906 (2005) (describing the “common claim … that fair use is dead). Cf. Glynn S. Lunney, Jr., The Death of Copyright: Digital Technology, Private Copying, and the Digital Millennium Copyright Act, 87 Va. L. Rev. 813 (2001); Robert C. Denicola, Mostly Dead? Copyright Law in the New Millennium, 47 J. Copyright Soc’y U.S.A. 193 (2000).
[6] Since publishing her groundbreaking article cited in supra note 2, Professor Gordon has defined “market failure” more broadly to take into account considerations of social justice. She now believes that “it makes sense to use the term ‘market failure’ broadly, whenever we have grounds to believe that bad results will follow from adhering to the rule of owner deference.” Wendy J. Gordon, supra note 3, at 164. See also Dan L. Burk & Julie E. Cohen, Fair Use Infrastructure for Rights Management Systems, 15 Harv. J.L. & Tech. 41, 44 (2001) (“The 2 Live Crew case thus is emblematic of a second type of market failure in which the value of socially beneficial uses of copyrighted works is not fully internalized.”)
[7] See Michael J. Madison, Rewriting Fair Use and the Future of Copyright Reform, 23 Cardozo Arts & Ent. L.J. 391, 396 (2005) (“[T]he statute itself has become not the embodiment of copyright’s blended nature, as Professor Weinreb argued, but a placeholder for all manner of arguments about limits …”); id. at 402 (“The substantive emptiness of fair use makes it something of a dumping ground for copyright analysis that courts can’t manage in other areas.”).
[8] See Gordon, supra note 5, at 904 (discussing arguments as to why fair use is “dangerous”); see also Jessica Litman, Copyright as Information Policy, 55 Law & Contemp. Probs. 185, 205 (1992) (criticizing the “bromide” that “[w]e do not have to worry about the use of copyright to impede the dissemination of ideas and information … because fair use is there to privilege such uses”).
[9] Jonathan Band, Office for Information Technology Policy, American Library Association, The Google Library Project: The Copyright Debate, Jan. 2006, at 9, found at (copy on file with the author).
[10] 17 U.S.C. § 106(1).
[11] Id. § 101.
[12] The information in volatile memory, such as “random access memory” (or “RAM”), is lost when power to the computer is interrupted. By contrast, nonvolatile memory, such as a hard disc drive or a flash memory device (“thumb drive”), can retain stored information even when the computer or device is not powered.
[13] They are:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.
17 U.S.C. § 107.
[14] See 17 U.S.C. § 107(1).
[15] See American Geophysical Union v. Texaco Inc., 60 F.3d 913, 922 (1994).
[16] See id. at 929 n.17 (“[W]ere a court automatically to conclude in every case that potential licensing revenues were impermissibly impaired simply because the secondary user did not pay a fee for the right to engage in the use, the fourth fair use factor would always favor the copyright holder.”) (citations omitted).
[17] Id. at 930 (citing, inter alia, Campbell v. Acuff-Rose Music , Inc., 510 U.S. 569, 592 (1994) (“The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop.”); Harper & Row Pubs., Inc. v. Nation Enters., 471 U.S. 539, 568 (1985) (observing that the fourth factor is concerned with “use that supplants any part of the normal market for a copyrighted work”) (quoting S. Rep. No. 473, 94th Cong., at 65 (1975)).
[18] Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 615 (2006) (quoting Castle Rock Entm’t, Inc. v. Carol Publ’g Group, 150 F.3d 132, 146 n.11 (2d Cir. 1998)).
[19] 510 U.S. 569 (1994).
[20] Id. at 584.
[21] Id. at 591 (citations omitted).
[22] Id. at 579.
[23] Id.
[24] See American Geophysical Union v. Texaco Inc., 60 F.3d 913, 929 n.17 (1994).
[25] Erin Crum, HarperCollins Publishers, HarperCollins Publishers to Create Digital Content Warehouse, Press Release, Dec. 12, 2005, found at (copy on file with the author).
[26] Erin Crum, HarperCollins Publishers, HarperCollins Publishers Selects Newsstand, Inc. to Develop Global Digital Warehouse, Press Release, Apr. 10, 2006, found at (copy on file with the author).
[27] In Kelly v. Arriba Soft Corporation, 336 F.3d 811 (9th Cir. 2003), for example, the Ninth Circuit Court of Appeals found transformation in the reproduction of digital photographic images as part of a search engine. Even though the images themselves were unchanged, except in size, the court noted that the defendant was using the images to “serve[ ] a different function” than was the plaintiff—i.e., “improving access to information on the internet versus artistic expression.” Id. at 818, 819. Because the defendant reduced the images into “thumbnails,” the court also found it unlikely that anyone using the search engine would be able to substitute the thumbnails for the original images; “enlarging them sacrifices their clarity.” Id. at 819; but see Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828, 847 (C.D. Cal. 2006) (distinguishing Kelly because “Google’s use of thumbnails on its image search [is] far more commercial than Arriba’s use” and “Google’s thumbnails lead users to sites that directly benefit Google’s bottom line [through advertising revenues]”).
[28] Campbell v. Acuff-Rose Music , Inc., 510 U.S. 569, 579 (1994).
[29] See id. at 597 (“It is not enough [for the purposes of fair use] that the parody use the original in a humorous fashion, however creative that humor may be. The parody must target the original, and not just its general style, the genre of art to which it belongs, or society as a whole (although if it targets the original, it may target those features as well).”) (Kennedy, J., concurring).
[30] Id. at 579.
[31] Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105, 1111 (1990).
[32] See Lloyd L. Weinreb, Fair’s Fair: A Comment on the Fair Use Doctrine, 103 Harv. L. Rev. 1137, 1143 (1990) (“A use may serve an important, socially useful purpose without being transformative, simply by making the copied material available.”).
[33] L. Ray Patterson, Understanding Fair Use, 55 SPG Law & Contemp. Probs. 249, 249 (1992). See also Jessica Litman, War Stories, 20 Cardozo Arts & Ent. L.J. 337, 365 (2002) (“Whether to impose a complicated legal regime on individual consumer consumption of copyrighted works is a crucial question on which reasonable people might differ violently. Resolving it requires us to decide what we have a copyright law for.”).
[34] See Leval, supra note 31, at 1110. In proposing that fair use depend “primarily on whether, and to what extent, the challenged use is transformative,” id. at 1111, Judge Leval opined that “[f]air use should not be considered a bizarre, occasionally tolerated departure from the grand conception of the copyright monopoly.” Id. at 1110 (emphasis added). Yet this is precisely what fair use has become, in part because of the emphasis on transformation itself.
[35] See Julie E. Cohen, Lochner in Cyberspace: The New Economic Orthodoxy of “Rights Management”, 97 Mich. L. Rev. 462, 492 (1998) (“Market ordering presupposes some ex ante distribution of entitlements. The cybereconomists take existing entitlements as given, and do not inquire as to the welfare effects of alternative entitlement structures.”).
[36] Julie E. Cohen, Copyright’s Public-Private Distinction, 55 Case W. Res. L. Rev. 963, 967 (2005).
[37] See U.S. Const. art I, § 8, cl. 8 (granting to Congress the power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their Writings and Discoveries.”)
[38] I do not take a position in this Article as to whether, and to what extent, creators should enjoy the exclusive right to make derivatives of their works. See 17 U.S.C. § 106(2). I leave that question for another day (and another article).
[39] See supra note 5 and accompanying text.
[40] See Mark A. Lemley, Romantic Authorship and the Rhetoric of Property (Book Review), 75 Tex. L. Rev. 873, 895 (1997) (“The idea of propertization begins with a fundamental shift in the rhetoric of intellectual property law…. [O]nly recently has the term ‘intellectual property’ come into vogue.”); id. at 900 (noting the view that “information is property and somebody should own it”). See also L. Ray Patterson, Free Speech, Copyright, and Fair Use, 40 Vand. L. Rev. 1, 32 (1987) (“The Constitution creates no property rights.”).
[41] Thomas Jefferson, Letter to Isaac McPherson, August 13, 1813, in Thomas Jefferson: Writings 1291-92 (Library of Am. 1984).
[42] Patterson, supra note 40, at 32.
[43] See U.S. Const. art I, § 8, cl. 8.
[44] See Leval, supra note 31, at 1110-11 (“The [statutory] factors …. direct courts to examine the issue from every pertinent corner and to ask in each case whether, and how powerfully, a finding of fair use would serve or disserve the objectives of the copyright.”).
[45] U.S. Const. art I, § 8, cl. 8.
[46] See Act of May 31, 1790, ch. 15, 1 Stat. 124 (1790).
[47] See U.S. Const. art I, § 8, cl. 8. By “Science,” the framers meant knowledge or learning. Eldred v. Ashcroft, 537 U.S. 186, 243 (2003) (Breyer, J., dissenting) (citing Edward C. Walterscheid, The Nature of the Intellectual Property Clause: A Study in Historical Perspective 125-26 (2002)).
[48] See James Madison (“Publius”), Federalist Paper No. XLIII, in James Madison, Alexander Hamilton, & John Jay, The Federalist Papers 279 (Penguin 1987) [hereinafter Federalist Papers], quoted in Eldred, 537 U.S. at 212 n.18.
[49] 17 U.S.C. § 202.
[50] See Arguments on the Bills S. 6330 and H.R. 19853, to Amend and Consolidate the Acts Respecting Copyright, Committee on Patents, H.R., 59th Cong., 164 (1906):
Mr. WALKER. According to this bill as you understand it, would it be competent for an author to print under his copyright notice a reservation prohibiting people from doing anything with that book except reading it themselves? Would it be competent for the author to prohibit the sale of that book by the purchaser?
Mr. STEUART. Yes, sir…. [U]nder the absolute right of the author, he could make any reservation he pleased. In other words, this so-called sale would be nothing but a license to read.
Mr. MCKINNEY. May I ask a question, Mr. Steuart? Was it the object of the draftsmen of this bill to break up the second-hand book business?
Mr. STEUART. Not at all.
(Statement of Arthur Steuart.)
[51] As Professor Benkler explained, “Users are individuals who are sometimes consumers, sometimes producers, and who are substantially more engaged participants, both in defining the terms of their productive activity and in defining what they consume and how they consume it.” Yochai Benkler, Freedom in the Commons: Towards a Political Economy of Information, 52 Duke L.J. 1245, 1268 (2003).
[52] 17 U.S.C. §§ 106(1)-(3).
[53] Id. §§ 106(4)-(6).
[54] Fogerty v. Fantasy, Inc., 510 U.S. 517, 527 (1994) (emphasis added).
[55] Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) (emphasis added); see also Eldred v. Ashcroft, 537 U.S. 186, 241 (2003) (“[U]ltimate public access is the overriding purpose of the constitutional provision.”) (Stevens, J., dissenting); Stewart v. Abend, 495 U.S. 207, 228 (1990) (in “balanc[ing] … the artist’s right to control the work during the term of the copyright protection and the public’s need for access to creative works,” “[t]he copyright term is limited so that the public will not be permanently deprived of the fruits of an artist’s labors.”).
[56] Stewart, 495 U.S. at 228-29 (“[N]othing in the copyright statutes would prevent an author from hoarding all of his works during the term of the copyright.”).
[57] See Harper & Row Pubs., Inc. v. Nation Enters., 471 U.S. 539, 569 (1985) (“Any copyright infringer may claim to benefit the public by increasing public access to the copyrighted work.”).
[58] See Fogerty, 510 U.S. at 527 (emphasis added).
[59] See Act of May 31, 1790, ch. 15, 1 Stat. 124 (1790).
[60] Glynn S. Lunney, Jr., Reexamining Copyright’s Incentives-Access Paradigm, 49 Vand. L. Rev. 483, 486 (1996).
[61] Id. at 487.
[62] See id. There are exceptions to this rule. In Meeropol v. Nizer, 361 F. Supp. 1063 (S.D.N.Y. 1973), the district court found the distribution of a book about Julius and Ethel Rosenberg to “serve the public interest in the free dissemination of information,” even though it contained portions of their copyrighted letters. Id. at 1068 (citation omitted). Similarly, in Time Inc. v. Bernard Geis Associates, 293 F. Supp. 130 (S.D.N.Y. 1968), the district court refused to halt the publication of a book containing copies of frames of the Zapruder film, holding, in part, that “[t]here is a public interest in having the fullest information available on the murder of President Kennedy.” Id. at 146. As precedents, however, these cases are exceptionally weak. Not only did they arise from events of unusual historic importance, but other courts have questioned whether they were rightly decided, even on their unusual facts. See, e.g., New Era Pubs. Int’l v. Henry Holt & Co., 873 F.2d 576, 589-90 (2d Cir. 1989) (“The district court [in Bernard Geis] … may not have properly evaluated the potential economic harm to the owner of the copyright in granting summary judgment to the defendants.”) (citing W. Patry, The Fair Use Privilege in Copyright Law 98-100 (1985)); Jackson v. MPI Home Video, 694 F. Supp. 483, 489 (N.D. Ill. 1988) (“To the extent [Bernard Geis] rests upon the idea that copyright must yield where ‘there is a public interest in having the fullest information available in the murder of President Kennedy’, it is probably inconsistent with Harper & Row v. Nation Enterprises, 471 U.S. 539 … (1985).”).
One other case bears mentioning. In Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), the Supreme Court cited a finding by the district court that copying television programs for later viewing “served the public interest in increasing access to television programming.” According to the district court, that interest was “‘consistent with the First Amendment policy of providing the fullest possible access to information through the public airwaves.’” Id. at 425 (citations omitted). The Supreme Court seems to have agreed with this analysis. See id. As Professor Jessica Litman has chronicled, however, Sony was an exceptional case in every way. See generally Jessica Litman, The Sony Paradox, 55 Case W. Res. L. Rev. 917, 929 (2005).
[63] See Leval, supra note 31, at 1110.
[64] Act of July 2, 1890, ch. 647, 26 Stat. 209.
[65] Act of Oct. 15, 1914, ch. 323, 38 Stat. 730.
[66] Act of Sept. 26, 1914, ch. 311, 38 Stat. 717.
[67] Act of June 19, 1934, ch. 652, 48 Stat. 1064.
[68] Act of July 5, 1946, ch. 540, 60 Stat. 444.
[69] Pub. L. No. 102-385, 106 Stat. 1460 (Oct. 5, 1992).
[70] Pub. L. No. 104-104, 110 Stat. 56 (Feb. 8, 1996).
[71] Cf. In re Trade-Mark Cases, 100 U.S. 82 (1879) (holding that Congress did not have the authority to promulgate trademark legislation pursuant to Article I, Section 8, Clause 8 of the Constitution).
[72] See 17 U.S.C. § 102(a) (“Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.”).
[73] See Maureen A. O’Rourke, Toward a Doctrine of Fair Use in Patent Law, 100 Colum. L. Rev. 1177, 1181 (2000) (“[I]ntellectual property law is part of a larger framework that includes other public and private law, including, particularly, antitrust.”).
[74] Act of July 2, 1890, ch. 647, §§ 1, 2, 26 Stat. 209, 209.
[75] Act of Oct. 15, 1914, ch. 323, §§ 2, 3, 7, 38 Stat. 730, 730-32; Dictograph Prods. v. Federal Trade Comm’n, 217 F.2d 821, 826 (2d Cir. 1954) (“Congress, in passing the Clayton Act, sought to bring within the scope of its proscriptive provisions, conduct and practices which though dangerous to the competitive structure, were not covered at all or only inadequately covered by the provisions of the Sherman Act.”).
[76] Act of Sept. 26, 1914, ch. 311, §§ 1, 5, 38 Stat. 717, 717-19.
[77] Butterick Publ’g Co. v. Federal Trade Comm’n, 85 F.2d 522, 526 (2d Cir. 1936) (citing Federal Trade Comm’n v. Raladam Co., 283 U.S. 643 (1931); Federal Trade Comm’n v. Sinclair Co., 261 U.S. 463 (1923)).
[78] See Herbert Hovenkamp, Federal Antitrust Policy: The Law of Competition and Its Practice § 2.1a (2d ed. 1999)
[79] Id. § 2.1a, at 50-51.
[80] See Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 117-18 (1986) (“Predatory pricing may be defined as pricing below an appropriate measure of cost for the purpose of eliminating competitors in the short run and reducing competition in the long run. It is a practice that harms both competitors and competition.”).
[81] United States v. American Linseed Oil Co., 262 U.S. 371, 388 (1923).
[82] See Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 4 (1958) (“The Sherman Act … rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress …”); Apex Hosiery Co. v. Leader, 310 U.S. 469, 492-93 (1940) (noting that the Sherman Act was intended to prevent “transactions which tended to restrict production, raise prices or otherwise control the market to the detriment of purchasers or consumers of goods and services, all of which had come to be regarded as a special form of public injury.”); Beal Corp. Liquidating Trust v. Valleylab, Inc., 927 F. Supp. 1350, 1367 (D. Colo. 1996) (“The federal antitrust laws seek to prevent manufacturers and sellers of products from exiting the market.”).
[83] United States v. Syufy Enters., 903 F.2d 659, 668 (9th Cir. 1990).
[84] See, e.g., Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 272 (2d Cir.1979) (noting that section 2 of the Sherman Act is designed to prevent “a pernicious market structure in which the concentration of power saps the salubrious influence of competition”), cert. denied, 444 U.S. 1093 (1980).
[85] United States v. Aluminum Co. of Am., 148 F.2d 416, 428 (2d Cir. 1945).
[86] Brown Shoe Company v. United States, 370 U.S. 294, 315-316 (1962); see also Monfort of Colorado, Inc. v. Cargill, Inc., 761 F.2d 570, 576 (10th Cir. 1985) (Noting that “Congress intended section 7 of the Clayton Act to prevent” industry concentration, which likely would result in “substantially lessened [competition] because of tacit collusion.”)
[87] Aluminum Co. of Am., 148 F.2d at 429 (emphasis added).
[88] See Red Lion Broadcasting v. Fed. Communications Comm’n, 395 U.S. 367, 390 (1969) (“It is the purpose of the First Amendment to preserve an uninhibited marketplace of ideas in which truth will ultimately prevail, rather than to countenance monopolization of that market.”); United States v. Western Elec. Co., 673 F. Supp. 525, 585-86 (D.D.C. 1987) (“[I]n promoting diversity in sources of information, the values underlying the First Amendment coincide with the policy of the antitrust laws.”) (citation omitted); see also Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 4 (1958) (observing that Congress has used the antitrust laws to create an environment “conducive to the preservation of our democratic political and social institutions”).
[89] 326 U.S. 1 (1945).
[90] Id. at 20. See also United States v. Associated Press, 52 F.Supp. 362, 372 (S.D.N.Y. 1943) (observing that that the media serve “one of the most vital of all general interests: the dissemination of news from as many different sources, and with as many different facets and colors as possible”), aff'd, 321 U.S. 1 (1945).
[91] United States v. Hilton Hotels Corp., 467 F.2d 1000, 1003 (9th Cir. 1972) (citing Northern Pacific Ry., 356 U.S. at 4; D. R. Wilder Mfg. Co. v. Corn Products Refining Co., 236 U.S. 165, 174 (1915)).
[92] Columbia River Packers Ass’n v. Hinton, 34 F. Supp. 970, 975 (D. Or. 1939) (citing Paramount Famous Lasky Corp. v. United States, 282 U.S. 30 (1930)).
[93] Reiter v. Sonotone Corp., 442 U.S. 330, 342 (1979).
[94] See William Goldman Theatres v. Loew’s, Inc., 150 F.2d 738, 743 (3d Cir. 1945) (“The purpose of the anti-trust laws [was] an intendement to secure equality of opportunity …”); Prairie Farmer Publ’g Co. v. Indiana Farmer’s Guide Publ’g Co., 88 F.2d 979, 982 (7th Cir. 1937) (“Clearly, the purpose of the Sherman Anti-Trust Act is to secure equality of opportunity …”) (citing Paramount, 282 U.S. at 42); El Aguila Food Products Inc. v. Gruma Corp., 301 F.Supp.2d 612, 627 (S.D. Tex. 2003) (Citing “an equal opportunity to engage in business, trade, and commerce” as “the primary feature of the private free enterprise system” that antitrust laws seek to safeguard).
[95] See United States v. Aluminum Co. of Am., 148 F.2d 416, 429 (2d Cir. 1945).
[96] See Timothy Wu, Copyright’s Communications Policy, 103 Mich. L. Rev. 278, 311-24 (2004).
[97] Pub. L. No. 104-104, 110 Stat. 56 (Feb. 8, 1996).
[98] Id. § 101(a), 110 Stat. 62, codified at 47 U.S.C. §§ 251(b)(3), (c)(3).
[99] Pub. L. No. 102-385, 106 Stat. 1460 (Oct. 5, 1992).
[100] See id. § 2(a)(4), 106 Stat. 1460 (“The cable industry has become highly concentrated. The potential effects of such concentration are barriers to entry for new programmers and a reduction in the number of media voices available to consumers.”).
[101] Id. §§ 4, 5, 106 Stat. 1471-81.
[102] Id. § 2(a)(11), 106 Stat. 1461 (“Broadcast television stations continue to be an important source of local news and public affairs programming and other local broadcast services critical to an informed electorate.”).
[103] Turner Broadcasting System, Inc. v. Fed. Communications Comm’n, 520 U.S. 180, 189-90 (1997) (quoting Turner Broadcasting System, Inc. v. Fed. Communications Comm’n, 512 U.S. 622, 662 (1994)).
[104] See Mark A. Lemley, Beyond Preemption: The Law and Policy of Intellectual Property Licensing, 87 Cal. L. Rev. 111, 170 (1999) (“Intellectual property is a deliberate, government-sponsored departure from the principles of free competition, designed to subsidize creators and therefore to induce more creation.”)
[105] See, e.g., Dastar Corp. v. Twentieth C. Fox Film Corp., 539 U.S. 23, 33-34 (2003) (discussing the “copyright monopoly”).
[106] Data Gen’l Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1184-85 (1st Cir. 1994) (in performing its “duty to harmonize two conflicting statutes,” i.e., the Copyright Act and the Sherman Act,
[107] Id. at 1184.
[108] In re Indep. Serv. Orgs. Antitrust Litig., 203 F.3d 1322, 1325 (Fed.Cir.2000); see also Data Gen’l, 36 F.3d at 1185 (“Although creation and protection of original works of authorship may be a national pastime, the Sherman Act does not explicitly exempt such activity from antitrust scrutiny …”).
[109] Christopher S. Yoo, Copyright and Price Differentiation, 79 N.Y.U. L. Rev. 212, 218 (2004).
[110] Richard A. Epstein, Liberty Versus Property? Cracks in the Foundation of Copyright Law, 42 San Diego L. Rev. 1, 23 (2005).
[111] Id.
[112] Yochai Benkler, Through the Looking Glass: Alice and the Constitutional Foundations of the Public Domain, 66 SPG Law & Contemp. Probs. 173, 181 (2003).
[113] Yochai Benkler, Intellectual Property and the Organization of Information Production, 22 Int’l Rev. L. & Econ. 81, 83 (2002).
[114] See Wu, supra note 96, at 329 (discussing how vertical integration threatens innovation); Julie E. Cohen, Copyright and the Perfect Curve, 53 Vand. L. Rev. 1799, 1811 (2000) (“An imbalance may result if a particular content provider has a dominant market share, or a unique and nonsubstitutable work.”).
[115] Benkler, supra note 113, at 83.
[116] Id. at 93 (“The differential effects of increases in intellectual property protection on divergent strategies suggest that such increases lead to commercialization, concentration, and homogenization of information production.”); see also Julie E. Cohen, Copyright, Commodification, and Culture: Locating the Public Domain, in The Future of the Public Domain 142 (P.B. Hugenholtz & L. Guibault, eds., 2006) (forthcoming) (“[T]he greater cultural standardization likely to occur under conditions of pervasive commodification is cause for substantial concern.”) (citing Benkler, supra note 113, at 81-99); Yochai Benkler, From Consumers to Users: Shifting the Deeper Structures of Regulation Toward Sustainable Commons and User Access, 52 Fed. Comm. L.J. 561, 575-76 (2000). As Professor Lunney put it, “[s]eeking the common denominator among a wider audience leads almost inevitably to a lower common denominator. As a result, striving for popularity may produce not a wonderful, cacophonous variety, but a dulling, repetitive sameness as works include over and over the same elements intended to cater to popular tastes …” Lunney, supra note 5, at 888-89; see also Neil Weinstock Netanel, Copyright and a Democratic Civil Society, 106 Yale L.J. 283, 360 (1996) (“[G]iven market dictates and institutional risk-averseness, media conglomerates share, at least to some extent, corporate patrons’ proclivities toward prosaic and safe products.”). This cloud may have a silver lining. As Professor William Fisher has speculated, “[t]he less attractive the menu of material ‘on the air,’ the more time people would probably spend in more active leisure activities.” William W. Fisher III, Reconstructing the Fair Use Doctrine, 101 Harv. L. Rev. 1659, 1777-78 (1988).
[117] Benkler, supra note 113, at 83.
[118] Worse, perhaps, “increased prevalence of Mickeys should lead to increased investment in forming preferences for their products. This should increase relative demand for their products. Repackaging the Mouse becomes not only cost effective, but also responsive to demand.” Benkler, supra note 113, at 97-98. See also Netanel, supra note 116, at 352 (“The public communication of fixed original expression will support a democratic civil society only if such expression is autonomous and diverse.”).
[119] Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 458 (1940) (“[T]he Sherman Act … is not only a prohibition against the infliction of a particular type of public injury but ‘a limitation of rights … which may be pushed to evil consequences, and therefore restrained.’”) (citations omitted). See also United States v. Microsoft Corp., 253 F.3d 34, 63 (D.C. Cir. 2001):
[Microsoft] … claims an absolute and unfettered right to use its intellectual property as it wishes: “[I]f intellectual property rights have been lawfully acquired,” it says, then “their subsequent exercise cannot give rise to antitrust liability.” That is no more correct than the proposition that use of one’s personal property, such as a baseball bat, cannot give rise to tort liability. As the Federal Circuit succinctly stated: “Intellectual property rights do not confer a privilege to violate the antitrust laws.”
(Citing In re Indep. Serv. Orgs. Antitrust Litig., 203 F.3d 1322, 1325 (Fed.Cir.2000).)
[120] 17 U.S.C. § 102(b).
[121] Kern River Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458, 1463 (5th Cir. 1990).
[122] See U.S. Const. art I, § 8, cl. 8.
[123] See, e.g., Dastar Corp. v. Twentieth C. Fox Film Corp., 539 U.S. 23, 33-34 (2003) (discussing the “copyright monopoly”).
[124] This phrase is associated with Professor Neil Netanel, who has written extensively on the subject. See, e.g., Netanel, supra note 116, at 289 (arguing that neoclassical economists have “import[ed] [into copyright] a theory of property that fails adequately to account for our fundamental, nonmonetizable interests in expressive diversity and informed citizenship”).
[125] It also resides at the heart of patent law. See United States v. Parker-Rust-Proof Co., 61 F. Supp. 805, 812 (E.D. Mich. 1945) (“The general objectives of the Patent Laws and the Anti-Trust Laws are the same. Both are intended to prevent unfair competition.”).
[126] Restatement (Third) of Unfair Competition § 1 comment a (1995).
[127] Id.
[128] Dastar Corp. v. Twentieth C. Fox Film Corp., 539 U.S. 23, 27 n.1 (2003) (citation omitted); see also William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 530-31 (1924) (because “petitioner sought to avail itself of the favorable repute which had been established for respondent’s preparation in order to sell its own,” holding “[t]he charge of unfair competition [to be] established”).
[129] See Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 413 (1916) (“[T]he common law of trademarks is but a part of the broader law of unfair competition.”).
[130] Id. at 412.
[131] Id..
[132] Act of July 5, 1946, ch. 540, 60 Stat. 444. The Lanham Act complemented the Federal Trade Commission Act of 1914, which had empowered the Commission to bring enforcement actions against those “persons, partnerships, and corporations” engaging in “unfair methods of competition in commerce.” Act of Sept. 26, 1914, ch. 311, §§ 1, 5, 38 Stat. 717, 717-19.
[133] S. Rep. No. 1333, 79th Cong., at 1 (1946), reprinted in 1946 U.S.C.C.A.N. 1274, 1274.
[134] Coach House Restaurant, Inc. v. Coach and Six Restaurants, Inc., 934 F.2d 1551, 1564 (11th Cir. 1991); see also James Burrough, Ltd. v. Sign of Beefeater, Inc., 540 F.2d 266, 274 (7th Cir. (in trademark infringement action, observing that “[a] third party, the consuming public, is present and its interests are paramount”).
[135] See Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 413 (1916) (“Common-law trademarks, and the right to their exclusive use, are of course to be classed among property rights, but …. the right grows out of use, not mere adoption.”).
[136] As the Eleventh Circuit Court of Appeals recently observed, “the word ‘publication’ is ‘a legal word of art, denoting a process much more esoteric than is suggested by the lay definition of the term.’” Estate of Martin Luther King, Jr., Inc. v. CBS, Inc., 194 F.3d 1211, 1214 n.3 (11th Cir. 1999) (quoting Melville B. Nimmer, Copyright Publication, 56 Colum. L. Rev. 185, 185 (1956)).
[137] See Academy of Motion Picture Arts & Sciences v. Creative House Promotions, Inc., 944 F.2d 1446, 1452 (9th Cir. 1991).
[138] Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961).
[139] Id.
[140] Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 412 (1916).
[141] Patterson, supra note 40, at 6.
[142] See U.S. Const. art I, § 8, cl. 8 (granting to Congress the power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their Writings and Discoveries.”)
[143] The Merriam-Webster Online Dictionary defines “public” as, inter alia, “exposed to general view: OPEN [definition 1a],” “of or relating to business or community interests as opposed to private affairs: SOCIAL [definition 4],” and “accessible to or shared by all members of the community [definition 6a].” Merriam-Webster OnLine Dictionary, available at (copy on file with the author). I do not use “public” to indicate “public law.” See id. (“of, relating to, or affecting all the people or the whole area of a nation or state [definition 2a] … of or relating to a government [definition 2b]”).
[144] 17 U.S.C. § 102(a).
[145] Id. § 201(d). A producer also may obtain rights in a copyrightable work by being the “employer or other person for whom the work was prepared” under the “work made for hire” doctrine. See id. § 201(b).
[146] 15 U.S.C. § 1127.
[147] See Blue Bell, Inc. v. Farah Mfg. Co., 508 F.2d 1260, 1267 (5th Cir. 1975).
[148] 17 U.S.C. § 106(1).
[149] 15 U.S.C. § 1114(1).
[150] Patterson, supra note 40, at 6.
[151] See Cohen, supra note 36, at 963-64 (arguing that “[c]opyright’s public-private distinction used to be clearly stated on the surface of the law and transparently visible in the law’s operation,” but that “[i]ncreasingly, for users, … the law no longer recognizes conduct in private.”)
[152] Keene v. Wheatley, 14 F. Cas 180, 185 (C.C. Pa. 1861).
[153] Copyright Act of 1976, Pub. L. No. 94-553, § 102(a), 90 Stat. 2541, 2544-45 (Oct. 19, 1976), codified as 17 U.S.C. § 102(a).
[154] Jessica D. Litman, Copyright, Compromise, and Legislative History, 72 Cornell L. Rev. 857, 858-59 (1987) (“[T]he new statute makes a number of fundamental changes in the American copyright system, including some so profound that they may mark a shift in direction for the very philosophy of copyright itself.”) (quoting Barbara Ringer, then Register of Copyrights).
[155] Sara K. Stadler, Forging a Truly Utilitarian Copyright, 91 Iowa L. Rev. 609, 641 (2006).
[156] Act of July 8, 1870, ch. 230, § 86, 16 Stat. 198, 212.
[157] Act of Mar. 3, 1865, ch. 126, § 1, 13 Stat. 540, 540; Act of Feb. 3, 1831, ch. 16, § 1, 4 Stat. 436, 436; Act of Apr. 29, 1802, ch. 36, § 2, 2 Stat. 171, 171; Act of May 31, 1790, ch. 15, § 1, 1 Stat. 124, 124.
[158] See Patterson, supra note 33, at 259; see also Patterson, supra note 40, at 12.
[159] Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)).
[160] See Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 118 (1986) (“In contrast to price cutting aimed simply at increasing market share, predatory pricing has as its aim the elimination of competition. Predatory pricing is thus a practice ‘inimical to the purposes of [the antitrust] laws,’ and one capable of inflicting antitrust injury.”) (quoting Brunswick, 429 U.S. at 488).
[161] Brunswick, 429 U.S. at 488 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962)).
[162] Restatement (Third) of Unfair Competition § 1 comment a (1995).
[163] Id. § 1 & comment a.
[164] 510 U.S. 569 (1994).
[165] Id. at 593; see also On Davis v. The Gap, Inc., 246 F.3d 152, 175-76 (2d Cir.2001) (observing that fair use would be found, notwithstanding the existence of market harm, “[i]f the harm resulted from a transformative … use that lowered the public’s estimation of the original (such as a devastating review of a book that quotes liberally from the original to show how silly and poorly written it is)”); Consumers Union of U.S., Inc. v. Gen’l Signal Corp., 724 F.2d 1044, 1051 (2d Cir. 1983) (“A court would not find it relevant … that [a] devastating critique had diminished sales by convincing the public that the original work was of poor quality.”)
[166] See, e.g., Harper & Row Pubs., Inc. v. Nation Enters., 471 U.S. 539, 562 (1985) (“The Nation’s use had not merely the incidental effect but the intended purpose of supplanting the copyright holder’s commercially valuable right of first publication.”); Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1277 (11th Cir.2001) (“[T]he preliminary record … suggests that The Wind Done Gone will not act as a substitute for Mitchell’s original…. [F]urther factfinding may well reveal that these two books will act as complements rather than substitutes.”); On Davis, 246 F.3d at 175-76 (“If … the secondary use, by copying the first, offers itself as a market substitute and in that fashion harms the market value of the original, this factor argues strongly against a finding of fair use.”); Consumers Union, 724 F.2d at 1051 (“The fourth fair use factor will come into play if too much is copied or if the entire plot is revealed, thereby usurping the demand for the original work.”).
[167] 292 F.3d 512.
[168] Id. at 517.
[169] Id.
[170] Id. (citing 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[B][1], at 13-193 (2002)).
[171] As Judge Posner explained,
A photograph of a Beanie Baby is not a substitute for a Beanie Baby. No one who wants a Beanie Baby, whether a young child who wants to play with it or an adult (or older child) who wants to collect Beanie Babies, would be tempted to substitute a photograph. But remember that photographs of Beanie Babies are conceded to be derivative works, for which there may be a separate demand that Ty may one day seek to exploit …
Id. at 518-19.
[172] Id. at 520-21.
[173] Id. at 520.
[174] Sara K. Stadler, The Incentives Trap in Copyright Law, — Hastings L.J. —, — (2007) (forthcoming).
[175] Id. at —.
[176] Id.
[177] Stadler, supra note 155, at 651; see generally id.
[178] See id. at 634 (defining “printed works” as “works that can be replicated without diminishing their market value among intended users making intended uses”). Professor William Landes and Judge Posner prefer the phrase “easily copied works.” See William M. Landes & Richard A. Posner, An Economic Analysis of Copyright Law, 18 J. Legal Stud. 325, 328 (1989).
[179] See James Madison (“Publius”), Federalist Paper No. XLIII, in Federalist Papers, supra note 48, at 279, quoted in Eldred v. Ashcroft, 537 U.S. 186, 212 n.18 (2003).
[180] Patterson, supra note 40, at 7 (“[I]f copyright encourages creation, it does so only for the purpose of profit. Profit, however, cannot be obtained without distribution.”).
[181] Stadler, supra note 155, at 632.
[182] Copyright Act of 1909, ch. 320, § 41, 35 Stat. 1075, 1084 (Mar. 4, 1909).
[183] See 17 U.S.C. § 109(a) (“the owner of a particular copy … lawfully made under this title … is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy …”).
[184] Patterson, supra note 33, at 262; see also Patterson, supra note 40, at 42 (“If the courts had perceived the dilemma, they could have avoided it easily by recognizing that the right to copy was, in fact, the right to copy and vend.”).
[185] But see Mark A. Lemley & R. Anthony Reese, Reducing Digital Copyright Infringement Without Restricting Innovation, 56 Stan. L. Rev. 1345, 1429 (2004) (describing it as a “major victory” for “copyright enforcers” if sharing occurs “among small groups of friends, rather than open sharing with strangers”).
[186] Mark A. Lemley, Property, Intellectual Property, and Free Riding, 83 Tex. L. Rev. 1031, 1052 (2005).
[187] See id. at 1058-65. See also Feist Pubs. v. Rural Tel. Serv. Co., 499 U.S. 340, 349 (1991):
It may seem unfair that much of the fruit of the compiler’s labor may be used by others without compensation. As Justice Brennan has correctly observed, however, this is not “some unforeseen byproduct of a statutory scheme.” It is, rather, “the essence of copyright,” and a constitutional requirement. The primary objective of copyright is not to reward the labor of authors, but “[t]o promote the Progress of Science and useful Arts.
[188] I do not take a position in this Article as to whether, and to what extent, creators should enjoy the exclusive rights of public performance and public display. See 17 U.S.C. §§ 106(4), (5). I leave that question for yet another day (and yet another article). See supra note 38.
[189] See 17 U.S.C. § 101 (definition of “publicly”).
[190] Marshall Leaffer, The Uncertain Future of Fair Use in a Global Information Marketplace, 62 Ohio St. L.J. 849, 850 (2001). Professor Leaffer does not explain why he places the phrase “copying problem” in quotation marks. See id.
[191] Peter K. Yu, P2P and the Future of Private Copying, 76 U. Colo. L. Rev. 653, 698-739, 740 (2005).
[192] William F. Patry & Richard A. Posner, Fair Use and Statutory Reform in the Wake of Eldred, 92 Cal. L. Rev. 1639, 1643 (2004).
[193] See id.
[194] Raymond Shih Ray Ku, Consumers and Creative Destruction: Fair Use Beyond Market Failure, 18 Berkeley Tech. L.J. 539, 548 (2003).
[195] Lunney, supra note 5, at 818; see also Patry & Posner, supra note 192, at 1643 (arguing that “unlimited” copying “would make it difficult and in some cases impossible for authors of expressive works to recoup their expenses in creating [their] work[s]”).
[196] See 17 U.S.C. § 101 (definition of “publicly”).
[197] Lemley & Reese, supra note 185, at 1374.
[198] See Wu, supra note 96, at 338 (“While this point is complicated by improved technologies of copy protection, so long as there exist rights that would be extremely expensive to enforce, the model of broad initial grants cannot be a complete answer.”).
[199] In 1970, for example, Justice (then Professor) Stephen Breyer complained that a “law-abiding user wishing to copy only a portion of a book or article … [would] have to buy the whole book …” Stephen Breyer, The Uneasy Case for Copyright: A Study of Copyright in Books, Photocopies, and Computer Programs, 84 Harv. L. Rev. 281, 316 (1970); See also Litman [Paradox], supra note 62, at 932 (“When Congress extended copyright protection to sound recordings in 1971, it had repeatedly affirmed that the Copyright Act did not then reach consumer home taping of music, and would not reach it as amended.”). Today, copyright owners are likely to take the position that “law-abiding user[s]” cannot copy, period—even if the purchased the book from which they wish to copy. But see Gordon, supra note 3, at 190 (describing a “judicial and legislative unwillingness to impose copyright liability on individual at-home users”).
[200] See Lemley & Reese, supra note 185, at 1376; Lunney, supra note 5, at 849 (“Digital technology has fundamentally altered copyright doctrine by making widespread private copying possible.”)
[201] I. Trotter Hardy, Property (and Copyright) in Cyberspace, 1996 U. Chi. Legal F. 217, 222.
[202] See Cohen, supra note 36, at 965 (noting that the Register of Copyrights believes that “[a]ppropriate norms to govern the public conduct of users must be publicly inculcated through a combination of persuasion and fear, which means that judiciously targeted lawsuits against users still have a role to play”).
[203] Cohen, supra note 116, at 160.
[204] Patterson, supra note 33, at 262; see also Patterson, supra note 40, at 42 (“If the courts had perceived the dilemma, they could have avoided it easily by recognizing that the right to copy was, in fact, the right to copy and vend.”).
[205] Professor Gregory Lastowka has observed that “[c]opies of the past were valuable objects,” F. Gregory Lastowka, Free Access and the Future of Copyright, 27 Rutgers Computer & Tech. L.J. 293, 300 (2001), and if anything happened to the power grid, copies of the future would be valuable objects, too. See also Michael J. Madison, Legal-Ware: Contract and Copyright in the Digital Age, 67 Fordham L. Rev. 1025, 1061 (1998) (“Books and other information in physical form, however, continue to play an important role.”).
[206] Cf. H.R. Rep. No. 551(II), 105th Cong., at 36 (1998) (in House Report on Digital Millennium Copyright Act, noting the “concern” of the Committee that “marketplace realities may someday dictate … less access, rather than more, to copyrighted materials,” which “result could flow from a confluence of factors, including the elimination of print or other hard-copy versions …”).
[207] U.S. Const. art I, § 8, cl. 8. In The Trademark Cases, the Supreme Court defined “Writings” to mean “the fruits of intellectual labor, embodied in the form of books, prints, engravings, and the like.” In re Trade-Mark Cases, 100 U.S. 82, 94 (1879).
[208] 17 U.S.C. § 102(a).
[209] See Douglas Lichtman, Copyright as a Rule of Evidence, 52 Duke L.J. 683, 730-34 (2003).
[210] See Wu, supra note 96, at 361 (“[F]ixed media has the advantage of the fixed form, packaging, and in some cases a superior product (real books are beautiful, very portable, and operate without batteries).”).
[211] Benkler, supra note 113, at 97-98.
[212] See generally Ginsburg, supra note 3.
[213] See Lunney, supra note 5, at 888 (“Seeking the common denominator among a wider audience leads almost inevitably to a lower common denominator.”).
[214] 464 U.S. 417 (1984). See also Litman, supra note 62.
[215] Sony, 464 U.S. at 442.
[216] Id.
[217] See Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., — U.S. —, — (2005) (instructing that “where evidence goes beyond a product’s characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement, Sony’s staple-article rule will not preclude liability” and observing that “the summary judgment record [was] replete with other evidence that Grokster and StreamCast, unlike the manufacturer and distributor in Sony, acted with a purpose to cause copyright violations by use of software suitable for illegal use”).
[218] Id. at —. See also A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). The holdings in Sony and Napster and Grokster are not limited to new technologies, of course. As Judge Leval once asked, “why not … enjoin the use of the camera, … the photocopier, and the computer—perhaps even pen and paper, or the printing press[?]” Pierre N. Leval, Fair Use Rescued, 44 UCLA L. Rev. 1449, 1457 (1997).
[219] See Grokster, — U.S. at — (quoting and distinguishing Sony, 464 U.S. at 442).
[220] Stephen M. McJohn, Fair Use and Privatization in Copyright, 35 San Diego L. Rev. 61, 90 (1998).
[221] Litman, supra note 62, at 960.
[222] Subafilms Ltd. v. MGM-Pathe Communications Co., 24 F.3d 1088, 1092-93 (9th Cir. 1994).
[223] See Grokster, — U.S. at —.
[224] See Litman, supra note 62, at 960.
[225] Pub. L. No. 105-304, tit. I, § 103, 112 Stat. 2860, 2863-77 (Oct. 28, 1998), codified at 17 U.S.C. § 1201 et seq..
[226] See, e.g., 17 U.S.C. § 1201(a) (prohibiting the circumvention of any “technological measure that effectively controls access to a work protected under [Title 17]”).
[227] See Gordon, supra note 5, at 915 (“[O]verbroad contract rules and the DMCA are the true threats. They threaten the culturally-viable practices that fair use has historically sheltered.”); Lunney, supra note 5; Dennis S. Karjala, Federal Preemption of Shrinkwrap and On-Line Licenses, 22 U. Dayton L. Rev. 511, 513 (1997) (“If these [shrinkwrap] ‘licenses’ are uniformly enforceable, all of the users’ rights of copyright will soon disappear.”). But see Goldstein, supra note 4, at 147 (arguing that “[b]oth the critics and the proponents of anti-circumvention rules have probably overstated the capacity of encryption measures to close off access to literary and artistic works” and noting that “[a]ny signal that can be seen or heard can also be copied, and without circumventing any encryption technology.”).
[228] Burk & Cohen, supra note 6, at 51. But see Ginsburg, supra note 3, at 125 (“[T]he ‘market failure’ genre of fair use should fade away in a world of ... direct enforcement of copyright through access controls.”).
[229] 86 F.3d 1447 (7th Cir. 1996).
[230] 17 U.S.C. § 102(b).
[231] 86 F.3d at 1454 (quoting 17 U.S.C. § 301(a)).
[232] 273 F.3d 429 (2d Cir. 2001).
[233] Id. at 458-59.
[234] Id. at 459.
[235] 17 U.S.C. § 301(a).
[236] Burk & Cohen, supra note 6, at 52 (“Where enforcement of a state law contract would violate the public policy inherent in the federal intellectual property scheme, or that embedded in the Constitution itself, such contractual provisions are preempted.”). Professor Wendy Gordon predicts that “if such contracts become so ubiquitous that they attach to virtually all copies, the result will be so property-like that courts will subject the contracts to copyright preemption.” Gordon, supra note 5, at 912.
[237] Lemley, supra note 104, at 145; see also Mark A. Lemley, Intellectual Property and Shrinkwrap Licenses, 68 S. Cal. L. Rev. 1239, 1269 (1995) (noting “the … complex question of whether and how to preempt certain parts of contract law without bringing down the whole edifice”).
[238] Lemley, supra note 104, at 145.
[239] See generally Burk & Cohen, supra note 6. “Rights holders that opt[ed] not to deposit keys with the escrow agent would be unable to invoke legal protection against circumvention.” Id. at 66. To their credit, Professor Burk and Cohen admit that their proposal “is a second-best solution designed to make the best of a bad situation.” Id. at 80.
[240] See Benkler, supra note 116, at 577-78.
[241] S. Rep. No. 190, 105th Cong., at 8 (1998); see also H.R. Rep. No. 551(II), 105th Cong., at 25 (1998) (“In contrast to the analog experience, digital technology enables pirates to reproduce and distribute perfect copies of works—at virtually no cost at all to the pirate.”); Universal City Studios, Inc. v. Corley, 273 F.3d 429, 435 (2d Cir. 2001) (“Fearful that the ease with which pirates could copy and distribute a copyrightable work in digital form was overwhelming the capacity of conventional copyright enforcement to find and enjoin unlawfully copied material, Congress sought to combat copyright piracy in its earlier stages, before the work was even copied.”).
[242] S. Rep. No. 190, at 12 (emphasis added). See also Corley, 273 F.3d at 441 (“[T]he focus of subsection 1201(a)(2) is circumvention of technologies designed to prevent access to a work, and the focus of subsection 1201(b)(1) is circumvention of technologies designed to permit access to a work but prevent copying of the work or some other act that infringes a copyright.”) (citing S. Rep. No. 190, 105th Cong., at 11-12 (1998)).
[243] Id. at 435 (emphasis added). See also Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 345 (S.D.N.Y. 2000) (“[T]aking what is not yours and not freely offered to you is stealing.”).
[244] See Corley, 273 F.3d at 435 (writing that Congress enacted the Digital Millennium Copyright Act in 1998 “to strengthen copyright protection in the digital age”).
[245] Julie E. Cohen, Some Reflections on Copyright Management Systems and Laws Designed to Protect Them, 12 Berkeley Tech. L.J. 161, 178 (1997). Professors Burk and Cohen have argued that “[i]n some instances of overreaching via technological controls, the Constitution may even demand a limited … ‘right to hack,’ to surmount privately erected technological barriers to information that the Constitution requires be publicly accessible.” Burk & Cohen, supra note 6, at 52.
[246] 376 U.S. 225 (1964) (citation omitted).
[247] Id. at 229.
[248] Lemley, supra note 104, at 157-58; see also id. at 163 (suggesting, too, that courts might wish to use the “contract defense of ‘void as against public policy’ … without invoking the mechanisms of preemption”).
[249] Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 978 (4th Cir. 1990).
[250] Video Pipeline, Inc. v. Buena Vista Home Ent’mt, Inc., 342 F.3d 191, 204 (3d Cir. 2003) (citations omitted); see also Practice Mgmt. Info. Corp. v. Am. Medical Ass’n, 121 F.2d 516, 520 n.9 (9th Cir. 1997); Lasercomb, 911 F.2d at 979 n.22.
[251] See James Madison (“Publius”), Federalist Paper No. XLIII, in Federalist Papers, supra note 48, at 279, quoted in Eldred v. Ashcroft, 537 U.S. 186, 212 n.18 (2003).
[252] Patterson, supra note 33, at 249.
[253] Litman, supra note 33, at 365.
[254] See Leval, supra note 31, at 1110.
[255] See Glynn S. Lunney, Jr., Fair Use and Market Failure: Sony Revisited, 82 B.U. L. Rev. 975, 977 (2002).
[256] See Weinreb, supra note 32, at 1148 (“To a considerable extent, primary resort to the market vindicates the copyright owner’s claim that the copyright is his property, to do with as he chooses; so long as a transfer may occur, he is allowed to obtain as large a share of the profit as he can.”)
[257] See Netanel, supra note 116, at 309 (“For neoclassicists, copyright enables owners to charge users for access to creative work public goods not so much to preserve author incentives as to determine what creative works are worth and thus to create a guide for resource allocation.”).
[258] See Gordon, supra note 2. Specifically, Professor Gordon has proposed to apply the fair use doctrine “[w]here (1) defendant could not appropriately purchase the desired use through the market; (2) transferring control over the use to defendant would serve the public interest; and (3) the copyright owner’s incentives would not be substantially impaired by allowing the user to proceed …” Id. at 1601.
[259] Goldstein, supra note 4, at 137; see also Lunney, supra note 255, at 976 (“Interpreted as an exceptional instance of market failure, Sony has become its own limitation.”); Ginsburg, supra note 3, at 125 (“[T]he ‘market failure’ genre of fair use should fade away in a world of perfect price discrimination ...”).
[260] Leval, supra note 31, at 1111; see also Campbell v. Acuff-Rose Music , Inc., 510 U.S. 569, 579 (1994) (describing a transformative work as a work that “adds something new, with a further purpose or different character, altering the first [work] with new expression, meaning, or message”).
[261] Leval, supra note 31, at 1110 (emphasis added).
[262] Zimmerman, supra note 3, at 260.
[263] See id. at 262 (“Rather than adding certainty to the fair use analysis, [the “transformation” test] seems … merely to have pumped more silt into already muddy waters.”).
[264] Weinreb, supra note 32, at 1143. See Lunney, supra note 255, at 977 (“Merely increasing access to a work, even unauthorized access, represents a sufficient public interest to invoke the fair use doctrine. A transformative or ‘productive’ use is not required.”).
[265] Campbell v. Acuff-Rose Music , Inc., 510 U.S. 569, 579 (1994).
[266] See Madison, supra note 7, at 402 (“The substantive emptiness of fair use makes it something of a dumping ground for copyright analysis that courts can’t manage in other areas.”);
[267] Gordon, supra note 2, at 1632.
[268] See Cohen, supra note 35, at 509 (“Self-evidently, this broad property-as-profit rule protects the status quo distribution of entitlements and wealth; a right insulated by a penumbra of monetary expectation will be relatively impervious to legislative change.”).
[269] See Gordon, supra note 2, at 1618. See also Justin Hughes, Fair Use Across Time, 50 UCLA L. Rev. 775, 777 (2003) (“[T]here is recognition that permitting too much adverse economic impact under fair use would undermine copyright’s incentive structure.”); Weinreb, supra note 32, at 1150 (noting the “broad agreement that a determination of fair use should depend largely, if not exclusively,” on “utilitarian assumptions about the copyright scheme,” including the question “does the use interfere with copyright incentives to creative authorship?”); Fisher, supra note 116, at 1687 (“The fair use doctrine enables the judiciary to permit unauthorized uses of copyrighted works … when doing so will result in wider dissemination of those works without seriously eroding the incentives for artistic and intellectual innovation.”).
[270] See Goldstein, supra note 4, at 141 (“Copyright owners will invest no more in producing copyrighted works than they can expect to profit from them, and if the profit horizon is systematically lowered by fair use, investment will be correspondingly lower.”)
[271] But see McJohn, supra note 220, at 89 (“[T]he role of fair use is broader and more central to the overall structure of copyright law.”).
[272] See supra Part II.
[273] See Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 420 (1984).
[274] Thus, Professor Stacy Dogan is correct in stating that “Sony’s exemption for noncommercial copying … would not have shielded the vast majority of unauthorized file sharing at issue in today’s peer-to-peer wars.” Comment: Sony, Fair Use, and File Sharing, 55 Case W. Res. L. Rev. 971, 971-72 (2005). Sony involved private copying, not the sort of public distribution that so characterizes “p2p.”
[275] Litman, supra note 62, at 929. Unfortunately, scholars also would be deprived of the wonderful article in which Professor Litman has told the story of the Sony case before the Supreme Court. See generally id.
[276] Patterson, supra note 40, at 7.
[277] Cohen, supra note 36, at 967.
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